2007-07-23 14:19:20 · 4 answers · asked by pace 2 in Business & Finance ➔ Investing
Nope, but if you write naked put options your broker will ask for a SUBSTANTIAL amount of margin to be deposited into your account before they let you trade it naked which will significantly reduce the return you receive for taking on all that risk.
2007-07-23 14:24:04 · answer #1 · answered by Anonymous · 0⤊ 1⤋
If
(1) you have a cash (not margin) account
and
(2) you want to exercise put options you own
you need to own the underlying shares since you are not allowed to have a short stock position.
That is the only condition associated with put options where you would need to own the shares.
2007-07-23 14:39:08 · answer #2 · answered by zman492 7 · 1⤊ 0⤋
No, you don't need to own shares. But you do need to have cash on hand to equal the value of the shares if they are assigned to you (you would then be writing cash-secured puts). Otherwise, you would be what is called a "naked writer," subject to unlimited risk. Most brokers would require that you qualify for the highest level of option trading (often Level 5) and that you have a large account ($100,000 or more) to write naked puts.
2007-07-23 14:38:43 · answer #3 · answered by Califrich 6 · 1⤊ 0⤋
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Get your copy at http://www.thewealthage.com and you can read my story there too :)
2007-07-26 11:50:25 · answer #4 · answered by Anonymous · 0⤊ 0⤋