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On Mon, 02 Nov 1998 15:47:21 -0700, you wrote:
>Adding to this thread - Is the trading of Puts and Calls allowed in any IRA
>accounts?
That is up to the broker.
Basically, you cannot "create" money in an IRA by going on margin.
The concept, is that you cannot sell a call on something you do not
have.
You can sell a call on securities in the IRA.
You can sell puts to acquire stock... only and only IF you have the
cash to cover the purchase. Therefore, you can write a put, but you
must have the underlying cash to pay for the exercise.
The issue is not so much what is allowed from a governmental aspect,
but from an accounting aspect which the broker can comfortably handle.
Remember that in a non margin account, if you write a put, the broker
has to lock in the funds until the option expires. This is easy to
discuss or handle in a margin account, but more difficult to monitor
in an IRA. I do not agree with the brokerage house handling, but that
is their easy way out.
-= Chris ß =-
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