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Well you might be able to short in a margin account. But ask your broker,
since the rules say only shorting in margin accounts. This how I would see
one shorting in an IRA account.
I am assuming I can trade puts and calls in my IRA. Buying a put is not
shorting since I paid for a contract in cash. I could later sell this
contract for cash (or a loss).
So I buy 1 put contract of XYZ with a strike of 35 and XYZ is trading at
40. XYZ drops to 20. I could sell my put for cash. Or I could buy 100
shares of XYZ at 20 and then exercise my put at 35. Since I bought 100
shares first and sold 100 shares later I didn't short the stock. Once you
exercise your option then it is considered taking possession of the
transactional obligation.
Now weather a broker will let you do this in a IRA account is another
story.
Harley
Christian Baude wrote:
> On Mon, 2 Nov 1998 21:44:17 -0500, you wrote:
>
> >Chris, Can I go short or is this creating money because the stock is
> >borrowed??
>
> I don't know the answer... I may call the broker tomorrow and ask
> him. Personally I don't think it's allowed, 'cause in theory you could
> go over the limit to cover the short.... again, a book keeping issue
> with the broker.
>
> I was allowed to write a put, up to the amount of cash to cover the
> assignment. But I think it is no longer allowed, either by regulation,
> or by the broker not being able to handle the book keeping.
>
> -= Chris ß =-
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