ome not?
2007-12-21 14:38:33 · 4 answers · asked by Anonymous in Business & Finance ➔ Investing
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Yes. However, a brokerage has a legal responsibility to watch out for the financial wellfare of its clients. Hence many brokerages require clients to demonstrate some knowledge about options before they will all them to trade options.
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It is legal because it cannot harm other innocent parties.
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Some interpret their responsibility to protect their clients differently.
2007-12-21 16:08:13 · answer #1 · answered by zman492 7 · 0⤊ 0⤋
Yes, straddles are legal and they are a frequently used investment strategy.
You need to be approved by your brokerage house to trade more complex options. Pretty simple paperwork to fill out. If you've done the paperwork and your brokerage house won't allow straddles, the switch brokerages. Fidelity, Schwab, TD Ameritrade, and the other big brokerages allow straddle trades.
2007-12-22 21:50:22 · answer #2 · answered by John W 3 · 0⤊ 0⤋
yes, it is perfectly legal. that is called going "long volatility" -- you bet that the stock will break out from its present range but do not know in which direction.
no idea why some brokerages won't permit buying a straddle. I wouldn't trade with one that didn't anyway.
2007-12-21 22:47:17 · answer #3 · answered by Spock (rhp) 7 · 1⤊ 0⤋
Sounds like you need a better broker.
2007-12-22 00:45:34 · answer #4 · answered by A5150Ylee 4 · 1⤊ 0⤋