Possible?!

[cigarno]

Example: you short 100 Citibank shares at (Interactive Brokers) and you write a naked put for 100 shares of Citibank at (MF Global). You get assigned for you put position. Can you use your naked put position at (interactive brokers) to cover your short position at (MF Global)?!

 

[MTE]

Quote from cigarno:

Example: you short 100 Citibank shares at (Interactive Brokers) and you write a naked put for 100 shares of Citibank at (MF Global). You get assigned for you put position. Can you use your naked put position at (interactive brokers) to cover your short position at (MF Global)?!

No. At least, it cannot be easily done.

 

[cigarno]

Why not?! aren't stocks fungible?!

 

[nazzdack]

Quote from cigarno:
----you short 100 Citibank shares at (Interactive Brokers)
----you write a naked put for 100 shares of Citibank at (MF Global).
----use your naked put position at (interactive brokers) to cover your short position at (MF Global)?!

1) You may need to have some type of omnibus account to cross-deliver related positions. The positions would have to be treated as separate outrights instead of a combo.
2) If "C" rallies, IB may hit you with a margin call on the short-shares.
3) If "C" declines, MFG may hit you with a margin call on the short-put.

 

[cigarno]

Thank you Nazdac
So it is possible?! ......My understanding is that Omnibus accounts are there to allow you to hold short and long positions simultaneously at the SAME BROKER

 

[nazzdack]

Quote from cigarno:
.......My understanding is that Omnibus accounts are.....

I do not completely understand that type of account, only that it might be what you need if you're going to "juggle" positions with more than one broker.

 

[spindr0]

Quote from nazzdack:

1) You may need to have some type of omnibus account to cross-deliver related positions. The positions would have to be treated as separate outrights instead of a combo.

Why would one do this in separate accounts in the first place?

 

[shortie]

Quote from spindr0:

Why would one do this in separate accounts in the first place?

money laundering?

 

[LeeD]

Quote from spindr0:

Why would one do this in separate accounts in the first place?

1) As a backup in case one of the brokers has technological problems
2) To hide the actual position from both brokers
3) There may be some commisssion/liquidity considerations... like one broker may offer pre-market size for stocks while the other broker is generally cheaper.

 

[JJacksET4]

Quote from LeeD:

1) As a backup in case one of the brokers has technological problems

If a person feels there is any chance of that, get a different broker IMO.

2) To hide the actual position from both brokers[/QUOTE]

100 shares of Citigroup????? IMO

3) There may be some commisssion/liquidity considerations... like one broker may offer pre-market size for stocks while the other broker is generally cheaper. [/QUOTE]

Way too much work for a tiny savings. IMO

This reminds me of a guy who for some reason wanted to go long and short the same stock at the same time for the same number of shares. There is no reason to do so, but you could open different accounts and do it (assuming it's legal). There is really no good reason to do that however.

JJacksET4