Taxable amount of a ShortSale

[Quanto]

I'm not convinced they made an error.

In this context, unsettled cash may not mean cash that you received from selling something. It may simply refer to cash that is on hold, and unavailable for withdrawal or trading, because it has to be there in case your short put is assigned. It's not cash flowing into your account. It's cash that was already there, but not it is unsettled until the short put is closed.

How do you then explain the case that unsettledCash is 0 when ShortSelling a Call?
As said the broker calcs it only when a ShortPut trade gets opened, but not for ShortCall trades.
Can you think of any logic in this?

 

[BMK]

How do you then explain the case that unsettledCash is 0 when ShortSelling a Call?
As said the broker calcs it only when a ShortPut trade gets opened, but not for ShortCall trades.
Can you think of any logic in this?

Aren't you trading in a cash account? No margin?

So the only way you could sell a call is if it is covered, either by a long call of a different strike/expiration (a spread), or a long stock position.

If you are long the stock, then you don't need any cash to sell a call.

If you are doing a spread, that involves a short call and a long call, you don't need cash the way you need it with a short put. With a short put, you have to have the full amount of cash needed to buy the stock (minus the premium you get from selling the put, if the broker allows that).

When you do a spread involving long and short calls, you only need the difference between the strikes. It's a very different formula.

Your short puts are cash secured. That's why that cash is on hold.

A short call is not cash secured. It's something else. LOL

 

[Quanto]

@BMK, the ShortCall case is this: CoveredCall combo order for opening both the underlying stock (as long) as well the ShortCall "at the same time". Yes, in a CashAcct.
The collateral here is StockPrice - Premium
(that at least is done correctly by the broker ).

Btw, with CashSecuredPut the collateral should be Strike - Premium, but the broker does (IMO wrongly) Collateral = Strike.

PS: by Collateral I mean the InitialRequirement to be able to place the order.

 

[BMK]

@BMK, the ShortCall case is this: CoveredCall combo order for opening both the underlying stock (as long) as well the ShortCall "at the same time". Yes, in a CashAcct.
The collateral here is StockPrice - Premium
(that at least is done correctly by the broker ).

Btw, with CashSecuredPut the collateral should be Strike - Premium, but the broker does (IMO wrongly) Collateral = Strike.

If you are long the stock, then you don't need any cash to cover a short call. The short call is covered by the stock. That is why there is no unsettled cash when you sell a call.

 

[Quanto]

Hach!
Today opened a new CSP, and unsettledCash now remains 0.0 !!!
Either they now have fixed it finally, or this error happens "spuriously"...

Reminder: in prev. postings above I had reported from exactly such a case, ie. CSP caused unsettledCash to become > 0.0.
As said today it did not...

Update:
Now I increased the qty to 2 at same premium $0.85 (and same strike 3.0). After this 2nd fill the unsettledCash has moved from $0.0 to $104.62. I try to find any logic in this and try to figure out this value...