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craig kelley wrote:
>
> Hey I've got a question for you OEX or stock option traders - I know
> I've brought
> this up before, but getting a clear answer is a pain. Let's say
> you've got a $100k
> account, all of which is cash one morning. You buy $100k worth of
> OEX calls, and
> sell them the next hour for exactly what you paid, so you've still
> got $100k. Question:
> are you allowed to trade with that $100k, or is it "used up" for
> the day since options
> are traded in a cash account?/// settlement is trade date plus
> one, yes?///Yes on options, T+1. I know you've got the full $100k to
> trade with the
> following morning, but since long options are traded in a cash (and
> not margin)
> account, I'm wondering if you can turnover that $100k multiple
> times within the same
> day.
Hi Craig,
You should be able to trade the entire 100 grand right after you close
the position in your example. But if your broker is sitting on his
thumb you'll need to tell him what you did. Remember that in practice
it is your broker's policies and abilities that limit you more than
third party rules. It's also good to have a working and talking
relationship with the brokers in the office that can over-ride automatic
computer settings which might initially disapprove of such a trade.
Best wishes,
James
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