But I have a question on cash covered puts in my IRA. Would they let me do it? I suppose I can just try it on Monday, but I had TsW and they told me what level of options privilege I had. IB said nothing and I cannot even read my message for some reason. Somehow think I've tried cash covered puts in ToS IRA and it would not let me. Sad.
I thought the levels are set by SEC for IRA, I am researching the "law" and cash-secured puts are in theory ok (if the broker allows it). I am looking at my Schwab IRA now. I have options there too (level2). Interestingly, cash covered puts are level 0.
In theory, since I have a ton of cash in my Schwab IRA, I can just keep selling TSLA puts at 150. But I rather sell puts on GLD or SLV and then pick them up at a little discount.
So I've had the unfortunate chance of dealing with brokerages that offer levels. Think Etrade and TD Ameritrade. It's more to protect the brokerage from liability incase you do something stupid. There's a Margin agreement you have to sign to pay for things under Margin. I know its possible to sell premium in cash accounts in the form of full cash Margin covered puts or calls which means you own the 100x shares as specified on option contract its self or have enough buying power since your well capitalized and don't need to sell premium on Margin. Which is what I assume you have over at TD Ameritrade the parent company of Think or Swim a cash accounts. Not Margin approval since you need that to sell premium on Margin. Futures options have SPAN margin you can find this at the CME website. Good luck man also apply for Margin privileges with IB. It's a real brokerage so no Haha. Levels, lmao. Welcome to the big leagues man.
Schwab specifically states that I can do cash covered calls, on their website (not specifically margin). I am not too concerned about IB as I mainly wish to trade futures there (smaller account) - cash covered calls need a bigger account! I fail to see how the margin comes into this - it is not borrowed money(IRA big no-no) only reserved for the position to buy the stock, per lot. For Tesla, I would need over 40k. But if I sell 250 puts that would only be 25k. Or AM I missing something? (margin math was never my strength.) EDIT: 150 dec TSLA puts are worthless but 250 is a decent premium (should have done before earning, now they collapsed)
It's the difference between Cash account only and Margin approved account really. Think Cash account which I assume is your IRA as a level 1 account. And the futures one a a Margin approves account non IRA. I'm not too familiar with a futures IRA but I'm sure some broker somewhere will do it. Try out tastyworks for that. Or a futures broker like RJ O Brian or even Optimus futures they can help you just call. I work for no one other then my self but I've been in this industry for about 8 years now. Apply for Portfolio Margin if you can man. I think that the fact that I have about 10% of the Margin requirement gives me a real worth while return. Just don't blow up! Its 125k account minimum per SEC rules.
I've done some cool shit with, Spreads on indices like SPX and NDX if your account is 125k and up with PM, or try looking at futures options man as they offer SPAN margin. I'm sure your smart man and you can figure it out from here. Peace out man
I am done with TDAmeritrade and move to Schwab due to their nice auto fund buying setup. Ameritrade refused to match Schwab futures commission and that was the last straw, I could never speak to a rep only if I waited hours, both Schwab and fidelity answer the phone instantly. I am level 2 at my Schwab IRA, but they disallowed options under 25k for my individual stock account. P.S. I am horrified of options on futures. In the last six months, I lost a few bucks and I am a bit risk-averse. (I had a ton of covered calls right before Jun mini-crash).
I'm happy to hear that. I know that selling a verticle spread or even buying one for a debit isn't bad if the stock does go past the further strike price so you can get the full profit and you only lose a Max amount so it's a defined risk strategy. Also under Portfolio Margin you can have reduced BP requirements and can get more Return on Credit for the Verticle spreads if you sell them.