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On Mon, 2 Nov 1998 19:12:31 -0500 (EST), you wrote:
>According to the SEC, yes. Your broker may not allow it, however. By
>"trading", however, you may buy puts and calls, and sell an existing
>position. You may not sell to open, other than covered call writes, as
>that would require margin.
Ummm... - margin is money you do not have, and that is a no no, as
IRA(s) cannot be used as collateral or for loans. I may have to call
my broker on this one. 'Cause I seem to recall I wanted to do
something similar at a later time and the broker would not allow it
(writing a put). I do seem to recall in my conversations, that the
brokerage house had had some problems, and could not lock in the cash,
pending the expiration of the put... I also seem to recall, that one
of the reasons, is that they would have to "escrow" the funds in a
non-interest bearing account, and it was an accounting (read computer
software) nightmare.
SOoooo.... they probably could do it, but do not have the proper tools
to handle such a small sector of their business.
FWIW, my discount broker does not handle LEAPS.... Why? Because his
software will not accept these long range options... @#!$!! So I have
to deal with a 'lesser' discount broker for that endeavor. That was 2
years ago... so maybe now he does. Also, he's not on the Internet...
go figure.... I think his days are numbered....
We must never forget that we are a pool to be milked by the larger
powers. As such, the laws favor the power, and not the pool. Thus if
the IRS/SEC now forbids this transaction, I doubt it was based on a
"social" motive.
-= Chris ß =-
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