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THE DOCTOR writes:
> The speaker was absolutely wrong. Leaps are options in every
> aspect.
Correct.
> However options can be done in IRA's. The only issue with using
> options is the use of leverage. So if a call is bought in an IRA ...
> the money market in the IRA must have the full strike on deposit.
This is true an ANY account, no? I don't think any options can be
bought on margin; at least that what it says on the Series 7 tests,
which are somewhat outdated. You can buy them in a margin account,
but must be paid for in full.
> Having said all of that a brokerage firm may not chose to do the
> business .. so you simply may need to find one that allows it. Very
> few allow any strategy other than covered call writing without a
> specific exemption from their Senior Register Options Principal so
> most brokers just say they don't allow it.
Fidelity allows me to buy puts and calls and write covered calls. As
you say, it's by broker. MOST brokers don't have the infrastructure to
pledge your cash, so those who don't won't allow covered puts either,
since they have no way to mark the cash you'd be using to cover the
put as "used" (collateralized, pledged, etc.).
> Fidelity simply won't do it
Not entirely true; my fidelity IRA account allows: Covered writing,
equity & index purchases (this is a direct cut/paste from my account
screen)
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