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Post by kc on Jul 1, 2014 18:05:58 GMT -5
That is correct.
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Post by chmith27 on Jul 1, 2014 18:31:57 GMT -5
Note that even though you can't use margin, there's nothing that prevents you from trading options in a retirement account (at least an IRA, because I'm doing it.) And options are an alternative (to margin) for gaining leverage...if you really want it. i think we were trying to trade options on margin and that is the apparent no no with the IRA as i understand it after a phone call to scottrade optionsfirst. i've been buying/selling options in my IRA as well, but i haven't ever done a naked put or call in that account as i've only done those in my other, non-retirement accounts. |
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Post by garrett on Jul 1, 2014 19:08:56 GMT -5
BaBa, why don't you use those short puts in a strangle - you have the time.
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Post by MnkdMainer (MM) on Jul 2, 2014 21:39:18 GMT -5
Note that even though you can't use margin, there's nothing that prevents you from trading options in a retirement account (at least an IRA, because I'm doing it.) And options are an alternative (to margin) for gaining leverage...if you really want it. Yes, absolutely. I have done that in my retirement accounts. Just wish I could retain my long position and still sell puts (which I expect to expire worthless). |
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Post by MnkdMainer (MM) on Jul 2, 2014 21:42:52 GMT -5
BaBa, why don't you use those short puts in a strangle - you have the time. I think I tried this and did not have option level 2 authorization. Does that sound right? But I don't recall exactly what the strangle strategy is. Can you explain? |
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Post by babaoriley on Jul 2, 2014 23:19:24 GMT -5
BaBa, why don't you use those short puts in a strangle - you have the time. A strangle, the way I play it anyway, would not work with puts that I've sold. I've played strangles, where, for example, a stock is at $20, and binary news is coming, so you buy a $24 strike call and you buy a $17 put, and hope that when the binary news hits, it moves the stock way up or way down. |
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Post by ashiwi on Jul 3, 2014 4:40:22 GMT -5
Yes Baba, you are right, I have been selling plenty of cash secured PUTS. Lately since approval I have been selling Nov 7's and 8's.
Premiums are very good and I expect them to expire worthless. I look to make about 12% on my secured cash over 5 months. Do that 2x a year and you are golden.
In an IRA account you need the cash to cover the put just in case the stock tanks and it gets "put" to you. You can always buy to close your put if you don't want to buy the stock. I've been selling out of the money puts over the past year with mnkd and it's been working out pretty good. In a margin account you don't need all the cash, but I won't let myself go on margin .
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Post by liane on Jul 3, 2014 4:53:12 GMT -5
I don't usually go long term on selling puts, but I did sell some Jan16 15P's for $7.90 in my margin account. If it does get put to me, I'll be acquiring shares for only $7.10, which I don't mind. If there's a huge spike in s/p in the interval, I'll just close the position to solidify the gain and move on to my next target.
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Post by garrett on Jul 3, 2014 8:16:58 GMT -5
BaBa, why don't you use those short puts in a strangle - you have the time. A strangle, the way I play it anyway, would not work with puts that I've sold. I've played strangles, where, for example, a stock is at $20, and binary news is coming, so you buy a $24 strike call and you buy a $17 put, and hope that when the binary news hits, it moves the stock way up or way down. BaBa, that's a long strange, I was referring to a "short" strangle. If you are short puts @ 9 then sell calls in the same month at say 11. The margin is no more than the put requirement and you collect more premium. However, an early partnership announcement would most likely send the price past your short call strike but you can roll the strangle position to the next period until the stock price sells off a bit. |
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Post by babaoriley on Jul 3, 2014 9:18:40 GMT -5
Got you, garret, sorry for the misunderstanding. I do sometimes do those types of strangles, although I hadn't called them that. I especially like them when my basic position on the stock is an uncovered call, then when I sell the put, no more margin and as you say you collect the premium essentially for free. Don't like to do that with MNKD so much, though, as I don't want to have sell uncovered calls against it. I was doing a lot of that on NFLX, after I got burned on the pure uncovered call positions I had. Did I say "burned?" More like "incinerated." LOL!
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Post by garrett on Jul 3, 2014 11:44:51 GMT -5
Got you, garret, sorry for the misunderstanding. I do sometimes do those types of strangles, although I hadn't called them that. I especially like them when my basic position on the stock is an uncovered call, then when I sell the put, no more margin and as you say you collect the premium essentially for free. Don't like to do that with MNKD so much, though, as I don't want to have sell uncovered calls against it. I was doing a lot of that on NFLX, after I got burned on the pure uncovered call positions I had. Did I say "burned?" More like "incinerated." LOL! Yes, being truly naked can hurt sometimes. The best short strangle (or straddle) you can put on is if you are cash secured on the put side and long stock (or Leaps) on the call side. That way, you either get put the stock or get your stock called away. If you get put the stock, sell more calls - it you get your stock called away sell more puts. If the underlying stays in a range you can create some good cash flow. |
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Post by papihoyos on Jul 10, 2014 6:51:21 GMT -5
You can trade options in a IRA or Roth account except naked calls. The margin required in a naked Put is the strike price less the amount received on the sale of the Put. Half my MNKD position is in stock and half in options. The way I played options is to sell the Put and buy the Calls. The Put expiration is generally shorter than the Call. The Calls are LEAPS. When the Put expires, I re-write or roll the naked Put.
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