|
PureBytes Links
Trading Reference Links
|
Chris, Can I go short or is this creating money because the stock is
borrowed??
-----Original Message-----
From: Christian Baude <BAUDECB@xxxxxxxxxxxxx>
To: metastock@xxxxxxxxxxxxx <metastock@xxxxxxxxxxxxx>
Date: Monday, November 02, 1998 9:34 PM
Subject: Re: Trading IRA accounts?
>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 =-
>
|