No i am not, you cannot get margin for ira, so how do you write naked contracts genius? show me a broker that let you short in your ira and i will eat my words. And fidelity is just fine for those monthly trades, i actually like their option page, fast and shows all the greeks/iv in 1 shot.
study: selling puts outperforms covered calls.
- Thread starter Free Thinker
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No i am not, you cannot get margin for ira, so how do you write naked contracts genius? show me a broker that let you short in your ira and i will eat my words. And fidelity is just fine for those monthly trades, i actually like their option page, fast and shows all the greeks/iv in 1 shot.
Interactive Brokers for one. For desert of humble pie, OptionsXpress is another.
yea. like he said. ib. i write cash secured puts in an ib ira with no problem.
Trading permissions in an IRA account
Overview:
IB offers Traditional, Roth and SEP IRAs any of which may be designated as a 'Cash' or 'Margin' type. The following article outlines the trading permissions provided under each type as well as restrictions which account holders should familiarize themselves with.
CASH TYPE PERMISSIONS
- Long stock, bond, mutual fund
- Long call and put options
- Short calls if covered by underlying stock (which is then restricted)
- Short puts if strike price is fully covered by cash (which is then restricted)
- Option spreads where exercise style is European and long leg expires simultaneously or after short leg
- Long or short futures contracts
Restrictions:
- Must have sufficient (unrestricted) cash available to support all outstanding orders
- Cash proceeds from sales not available for withdrawal or trading until settlement (generally 3 business days for stock, 2 for Forex and 1 for options)
- No short stock
- No negative or debit cash balance (subject to immediate position liquidation in an amount sufficient to restore cash to non-negative balance)
- Not allowed to hold a cash balance or position denominated in a currency different from the Base Currency of the account.
- If the exercise or assignment of an option results in the delivery of either a long stock position for which the account does not have sufficient cash to purchase (e.g., call exercise) or any short stock position (e.g. put exercise) the account will be subject to liquidation.
MARGIN TYPE ACCOUNT
- Long stock, bond, mutual fund
- Long call and put options
- Short calls if covered by underlying stock (which is then restricted)
- Short puts if strike price is fully covered by cash (which is then restricted)
- Option spreads where long leg expires simultaneously or after short leg (no exercise style restriction)
- Long or short futures contracts
- Long balance in non-Base Currency
Restrictions:
- Reg T margin rules enforced (including Pattern day Trading rules)
- Cash proceeds from sales not available for withdrawal until settlement (generally 3 business days for stock, 2 for Forex and 1 for options). Unsettled funds may be used for trading
- Cash proceeds from unsettled sales are available for trading as long as the subsequent purchase order does not settle prior to the sale order
- No short stock
- No negative or debit cash balance (subject to immediate position liquidation in an amount sufficient to restore cash to non-negative balance)
- If purchasing a security or trading a product denominated in a currency different from the Base Currency of the account, a currency conversion must first be executed
- If the exercise or assignment of an option results in the delivery of either a long stock position for which the account does not have sufficient cash to purchase (e.g., call exercise) or any short stock position (e.g. put exercise) the account will be subject to liquidation
- Not eligible for Portfolio Margining
http://ibkb.interactivebrokers.com/node/188
Never knew it was there!I like the strategy of shorting naked puts. If you do your research on stocks you like, you can easily come up with a list of stocks you'd like to own. Then you can just start OTM selling puts, 15% to 25% (or more) below the current price. As time goes by, and the stock keeps hanging around its price level you become sure the premium is yours without further obligations.
If it gets hit, you get the stocks that you studied in the first place.
Only disadvantage, once you see one of your stocks starts rallying you stay behind with a (small) premium amount, while you could have made way more money by just owning the stock.
If it gets hit, you get the stocks that you studied in the first place.
Only disadvantage, once you see one of your stocks starts rallying you stay behind with a (small) premium amount, while you could have made way more money by just owning the stock.