Abouttbaarr Expertise I answer only public questions on leap call options and how i use them.
I was retired as a single man in 1996, but in 1998 I got married and now with 2 daughters 4 and 8,as of aug 2007,I found it necessary to drive big rig back since 2004 so I could provide them with AFFORDABLE quality health insurance.
I use a trend theory that parallels the dow and trade stocks that follow the dow consistantly
some of my successes was IBM`s jan 2005 100 call ZIBAT
bought at 330 350 and 380 when ibm bottomed at 55-59 and sold at 580 when the stock hit 68-70
5k profit on each 10 k tied up
I have found my screename being linked to garbage financial sites that I have no association with.
Please ask me before you use any of these sites,
or let me know at my website or my blog.
http://www.geocities.com/tbaarr/night_vision.html
http://www.tbaarr.blogspot.com/
Experience Since 1991 have traded leap calls for over 10 years on high quality stocks
and make 30-50% as a average i do this for fun and for free so others may benefit
Organizations ex top 10 askme.com expert i used the screename tbaarr there also
my specialties are described by the topics below
credit ,leap options explanation and use, trading leaps,
analysis of stock price vs leap price
and shaving the bid or the ask price when using covered calls
remember if you get 10 bucks shaved off the bid and ask price of a covered rollout
on 5 contracts
you covered your commission
Expert: tbaarr Date: 7/11/2008 Subject: Options buying and selling
Question I have two questions. First, different brokers have different margin requirements for selling options. With that in mind, since the broker controls the margin amount, can brokers sell options without margin?
Also, there is an option strategy called the Iron Condor spread where one buys and option while simultaniously selling another options. I was told that with this strategy, the risk is only the amount you use to buy one of the two options. My second question is, how could that be the only risk? What if the option that was sold is exercised? Since there is nothing to cover it, wouldn't that be a risk?
Answer you must ask a brokerage margin dept that question as I have no clue and its never been an issue to me as I trade cash for options.
you are correct about the risk if you are selling a naked position that has no underlying stock to use if exercised.
This is why I never sell naked either. and I rarely ever sell short.
It sounds like your broker is not telling you the entire truth.
Now one strategy I do use is if I own a stock that is up from where I bought it at.
I cover with a close covered call and then buy puts with the premium I was paid from selling the covered call.
IF the stock goes up I still make a small profit on the covered call
as I will sell the puts at a loss .
but those puts were bought with the money received from selling the covered calls.
so its a no lose situation.
The stock gets exercised at a profit so the covered calls go away and there fore any leftover premium from their sale is pure profit above the profit on the actual stock.
example
ibm is 122 a share
so I would sell the 125 call good till jan 2010 symbol wibae.o
and I would buy the 110 put for jan 2010 wibmb.o
but thats just me
and I would always use leap call options and go out in time as far as I could.
