Firms that allow naked options selling

Discussion in 'Options' started by NakedPutSeller, Jan 16, 2010.

  1. Disclaimer: This post is NOT about the merits/demerits of selling OTM naked puts. Yes, I am fully aware of the risks involved with naked put selling.

    I am looking for firms/brokerages/propshops in the US that provide risk-based margining on short naked put options postions. Please let me know of such firms if if there exist?

  2. You will be able to sell naked options with almost any broker but if I'm reading your question right you're wondering what the requirement for portfolio margin (risk based margin) is.

    Not sure on the exact $$$ requirement but here's how I remember them.

    Interactive Brokers (100k which I think is also the regulatory requirement, so you don't find anything with less capital requirement)

    Thinkorswim (125k and a basic test to get portfolio margin, 115k maintenance requirement [I think])
  3. Thanks, I know about these brokerages. I am interested in knowing of any prop firms or JBO's that allow naked put selling. I am willing to put up trading capital of about $100k-$200k.
  4. gkishot


    100K maintenance requirement (I think).
    BTW I don't think that with both those firms you have to have portfolio margin to get risk based margin on short options.
  5. They all allow naked put selling...

  6. zdreg


    are u victor neiderhoffer in disguise trying to make a comeback?
  7. You can sell naked puts in IRA's... The margin requirement shouldn't be any different than that for a covered call.

  8. huh.. i do sell naked puts in my tradeking IRA.. but it sucks.

    I sold MONSANTO 80 put.. I got 102$.. it blocked 8000 for 2 weeks

    basically it is a covered put.. they block the entire money.

    i tried to sell a put on GOOG. 560.. he he. it was asking 56000. not a penny less

    in my IB naked account, it usually blocks like 3-4K. but that is dynamic depending on where GOOG is . each minute..
  9. rew


    In an IRA you have to have cash to fully cover 100% of the cost of buying the stocks at the strike price when you sell puts. Basically you can't do anything in an IRA that could potentially cause you to owe more cash than you have in your account. For example, in my IRA I can't sell naked calls at all but I can (and do) sell call spreads.

    Selling puts is a reasonable thing to do in an IRA if you really do want to buy the stock, just cheaper than it is now. But if you're trading and don't really expect to be put to the stock (and intend to buy the puts back at a loss if the trade goes bad) an IRA isn't the place to do that.
  10. plain simple,, dont expect any leverage in an IRA

    spreads , u can do all that you want, as you have the risk defined .

    back to the OP.s question,

    i;ll tell you something which I encountered in 2008 .before the crash,

    tradeking and others had a 100K limit to allow naked Call writing

    for naked puts it was only 25K..

    then zecco came along and gave naked put/call writingfor only 50 K margin.. then one fine day, in the middle of an option trading month, when I tried to place naked call trade, it did not go thru. this was oct or nov 2008 i recall

    when I called up zecco and asked , ,that I have 50K, and I cud not place a naked call trade, they told me that due to market conditions they have changed the margin requirement. to guess what. 250K !!

    that too they did it in the middle of an option month. it sucked big time, that was the last I used them. I moved to optionshouse, where if u have 25K, I think they allow you to do all the naked calls/puts u want. but each trade has it own margin requirements.
    #10     Jan 18, 2010