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To: upanddown who wrote (7506)2/19/1999 2:55:00 PM
From: JHR  Respond to of 14427
 
John, I'm not an expert in this either, but it essentially means that you have to maintain enough buy power in your account to cover buying the stock you sold the Put for, since you're liable for covering it if someone wants to sell it to you until the put expires. As Thean said you collect the value of the put thereby lowering your cost.



To: upanddown who wrote (7506)2/19/1999 4:00:00 PM
From: Thean  Read Replies (1) | Respond to of 14427
 
John,
You answered your own question - If you sell 10 RIG 30's, that means that $30,000 cash is unavailable until the put is either covered or expired.

The total buying power - check mama bear's response on the Waterhouse thread. If still confused, call Waterhouse and have the rep explain it. It does get complicated with option and everything. I don't trust the buying power number on webBroker.


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