Selling Puts

I was joking in the first part of my post lol. I believe the intent was to prevent you from naked put writing, but they let you do the synthetic equivalent of covered calls so they do not know much about options.

Thinkorswim or Interactivebrokers will pretty much let you do anything your margin will let you :)
 
Quote from pcgeek86:

However, the one point where I think you're just slightly off is that they are allowing a Sell To Open, but not a Buy To Close.
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Are you sure? Your quote of their contract said you can:

Sell Covered Calls
Buy Calls
Buy Puts

Scottrade does not allow put selling or naked options.
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This would mean you can BTO calls or puts, and you can STO a call which is covered. They don't seem to allow a STO for puts.

I can see your confusion though, "put selling or naked options" is a confusing terminology. A sold put is a naked option, so why make those two separate clauses?

Anyway, you know you've gone off a cliff when you're asking EliteTrader to interpret contracts. You should probably give Scottrade a call. :-)
 
Quote from optioncoach:

I was joking in the first part of my post lol. I believe the intent was to prevent you from naked put writing, but they let you do the synthetic equivalent of covered calls so they do not know much about options.

Thinkorswim or Interactivebrokers will pretty much let you do anything your margin will let you :)
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Haha, ok thanks! I just didn't want to get stuck with a put contract that I couldn't sell back into the market! LOL .. question answered, take care. :)
 
Quote from FullyArticulate:
I can see your confusion though, "put selling or naked options" is a confusing terminology. A sold put is a naked option, so why make those two separate clauses?[/B]
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I'm sure that if they used a comma "put selling, or naked options, ..." that would have helped. Damn grammatical errors

/grammar nazi

BTW, I'm pretty sure I asked the guy about it when I walked into my local branch a few weeks ago when I turned in my application, and he confirmed that you can't sell puts. Either way, I'm fucking confused, and now that optioncoach has cleared up my confusion, I'm putting it to rest. Thanks for your help, FullyArticulate :-) Cheers
 
PCGeek,

Just my 0.02 since I was using Scottrade several years back when I started using options within my trading plan.

You may want to heed Coach's advice and pursue a different broker. One that is well versed with options trading. The problems with Scottrade are as follow:

(a) they will not give you the best fills
(b) they overcharge you in commissions relative to competitors
(c) without the ability to 'Sell to Open', you cannot create more conservative (or aggressive) positions.

On the third point, I could understand that they do not want you to sell naked calls or puts, but why prevent you from opening debit or credit spreads??

Oh and their customer service needs much improvement (at least at the local office where I live). Took 3 phone calls to close my account.
 
Quote from pcgeek86:

Hey guys, I know it sounds weird. For clarification's sake, this isn't an IRA account. I saw a couple of you saying it might be an IRA limitation, although I honestly don't think that's the case. To me, it appears to be a brokerage-wide limitation.

Attached is the PDF application for an options account. Take note of the text near the two checkboxes.

Here is a quote from the options trading page on a standard "individual" account.
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I think they do not allow Credit Spreads either.
I was going to sign up with them, but did not because of that.
 
not allowing credit or debit spreads makes no sense and is a sure sign the broker knows nothing about options ;). Once you deal with Thinkorswim, InteractiveBrokers or Optionsxpress you will see what I mean lol...
 
I actually loved Scottrade's customer service. I am sorry to leave them, but I can't realistically continue trading as often as I do with their high commissions. The people at my local branch are very respectful and helpful.

I have transferred my account away from them due to commissions and the options issues. IB's tools (read: TraderWorkstation) absolutely demolish Scottrade, too, so the $10/month fee is pretty much moot.
 
" but wouldn't a Sell To Open be the equivalent of purchasing a put option?"

no. for petes sake. no offense, but at least do a little research

if you purchase a put option from a flat position, you are BUYING to open

Selling to open = WRITING an option. which was my point. people are conflating selling and writing, whcih is fine but you need to understand the difference

if i buy a put, i am long a put. i aint writing ANYTHING.

again, the printout from scottrade said what i suspected

they are talking about WRITING options as it clearly says

they do allow the writing of covered calls, as i suspected but not naked ones
 
Oh, damn. Thanks for the clarification. I only made my first options trade in late December. I did study a lot beforehand, and the calls, puts, and naked puts all make sense, but the BTO/STO/etc. terminology mixes me up. Sorry

/geek

EDIT: You have no idea how many hours I have put into studying the markets thus far. I don't ask questions because I'm too lazy to do my own research.
 
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