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Author: gollemf Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 266545  
Subject: Neophyte needs Help!!! Date: 9/13/2012 12:49 PM
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To Jeff & Staff,

I have an IRA account and my Brokerage would only grant me level 1
which allows me to so do one thing "sell covered calls" only.
I was told it is their policy (USAA) or is this an IRS regulation?

I really want to learn Option Trading. Will other brokerage firms who are not as conservative as USAA allow me to do more? If you can recommend which brokerage to use, I would really appreciate it.

Otherwise if all brokerages have the same restrictions, I guess I have to cancell my subscription.

Thanks so much.
v/r
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Author: TMFSandman Big red star, 1000 posts Feste Award Nominee! Old School Fool Coverage Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 259241 of 266545
Subject: Re: Neophyte needs Help!!! Date: 9/13/2012 4:11 PM
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While IRA accounts allow you to buy calls, buy puts, and sell covered calls, you will not be able to sell naked puts or sell naked calls, which also prevents you from entering into more complex options strategies. Those rules limit your options-related loss to the purchase price of the options contract you bought. Some IRA accounts also will allow you to sell cash-secured puts, where you have to be holding enough cash in the account to buy the shares at the exercise price should they be put to you.

The reason for these limitations is that retirement accounts are by law not marginable accounts and selling naked options is a form of margin, since you are using your account value as collateral in case the trade doesn't go your way.


Mike

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Author: gollemf Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 259242 of 266545
Subject: Re: Neophyte needs Help!!! Date: 9/13/2012 5:02 PM
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Does it make sense for me to subscribe MF Options if I am only able to buy only covered buy calls, buy puts and sell coverd calls.

Assuming you are in my position, will you continue to be doing options or just get out of it? Looking forward to your honest opinion. All I need if possible is a yes or no answer. I just have to accept it.

Thanks. appreciate the help.

Mario

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Author: TMFSandman Big red star, 1000 posts Feste Award Nominee! Old School Fool Coverage Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 259243 of 266545
Subject: Re: Neophyte needs Help!!! Date: 9/13/2012 7:55 PM
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Mario,

I think it depends on what your goal is. There are many moves made in the MF Options service that are indeed just straight call/put buying. In addition, it is an awesome educational resource with some excellent advisors leading the service. If you want to learn more about options it's a great place to do so and unlike many other educational sources TMF Options provides you with an interactive outlet to ask questions on the discussion boards.

If your goal is to be able to follow every single trade the service makes and your only account is an IRA, then you'll have to be okay with the fact that you'll need to sit out the ones that expose you to leveraged downside. That said, you'd probably want to be doing that anyway as you are just learning about the basics of options.


Mike

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Author: Quillnpenn Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 259245 of 266545
Subject: Re: Neophyte needs Help!!! Date: 9/14/2012 9:24 AM
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http://optionshouse.com/

Quillnpenn -

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Author: PeterLincoln Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 259421 of 266545
Subject: Re: Neophyte needs Help!!! Date: 10/7/2012 1:36 AM
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Hi,

In my opinion one should not be doing any options trading (with the possible exception of covered calls) in any retirement account. While it's true you shelter your gains (if any) your losses are gone forever.

Good Luck,

pl

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