Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (7) | Ignore Thread Prev | Next
Author: joelcorley Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 25316  
Subject: Re: 401k Plans and Options Trading Date: 12/20/2012 6:00 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 1
thinkfirst100,

You wrote, I would like input on the legality of options trading in 401k plans by the Trustee. Schwab tells me margin is not permitted in 401k accounts and that limits the level of trading authorization a trustee can obtain and use. Any input on this subject would be much appreciated, and knowledge of other brokers who might not share this position, if it is legal.

I'm not aware of a rule preventing margin in a 401(k) account - only in an IRA. But I'm also not personally aware of any 401(k) providers that offer margin. Many brokers do offer limited options trading without margin in their various retirement account products. As long as the broker can ensure there is no chance exercising the option would result in a loan against other assets, they should be able to offer options in an IRA (or 401k). But just because they can doesn't mean most 401(k) providers do even that.

Also the selection of a 401(k) trustee is handled by your employer. If your employer selected Schwab, you would need some pull with their benefits group to get the 401(k) trustee changed. Of course if you are your own employer, you can always set up a Solo-401(k) wherever you want.

- Joel
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (7) | Ignore Thread Prev | Next

Announcements

Foolanthropy 2014!
By working with young, first-time moms, Nurse-Family Partnership is able to truly change lives – for generations to come.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Post of the Day:
Macro Economics

The Story Behind the Story
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement