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At 10:26 AM 4/27/98 -0500, THE DOCTOR wrote:
>NO OPTION TRANSACTION IS ILLEGAL IN IRA ACCOUNTS YOU CAN DO ANY
>STRATEGY LEGALLY>WHAT YOU CAN'T DO IS BORROW MONEY. SO YOU CAN
>SELL AN UNCOVERED PUT, BUT YOU HAVE TO MAINTAIN THE FULL STRIKE
>IN CASH.
>
>Proffittak wrote:
>
>> it is illigall to do even what fidelity allows
>>
>> the irs publication only allows selling covered calls
>> if you do more it is TAXABLE INCOME THAT YEAR!!!!!
>
>
>
>
What is all the *yelling* about? The law simply forbids
borrowing on qualified accounts (IRA's, KEOGH's, etc., but
not plans like 401K's). That means you cannot have a margined
IRA. Therefore you cannot sell short. And last of all that
means you cannot sell uncovered calls or short except against
the box (and I have never heard of any custodian allowing
shorting even against the box).
Investment companies that act as custodians of qualified accounts
impose additional restrictions. Do not take these as ultimate
statements of law.
PeteNa9090
petena9090@xxxxxxxxxxxxxx
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