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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study! -- Ignore unavailable to you. Want to Upgrade?

To: tuck who wrote (10772)	5/13/1999 11:37:00 AM
From: David Wright	Read Replies (1) \| Respond to of 14162

Tuck, I think you may be surprised at how low the margin requirements are for naked put writing. My issue is that even if the broker requires minimal margin, I must self-impose equity to cover the possibility of an exercise. This takes capital out of play, that I could have in an out-of-the money CC combination, that could appreciate (beyond my ROI from the premium) if the stock moves up above my purchase price. Capital held in reserve to cover an exercise of the naked put write is capital that I can't put in a "speculative" position. I think somebody else said this earlier too. Might have been Roger (NateC), and HE has an MBA. Hope I'm not thinking in circles on this.