def - what about buying calls ? i.e. buying calls(funds equal to the aggregate exercise value of the long calls are restricted) http://www.interactivebrokers.com/i...e.html~top.body Does this mean I have to have funds available in my account to cover the exercise of the call ? I was thinking of purchasing a LEAP and don't have enough funds in my IRA at this time to cover the exercise amount. I will later though because of future IRA contributions. In fact, I may want to just sell the option later and not exercise it.
Any news on when the new 721 release of TWS/4 release will be available for download? I've tried several times over the week-end to no avail.
Wow, you mean if I want to buy a call in a cash account I need to have enough money set aside (doing nothing) so that IF the call is exercised I have enough to buy the stock?? That's NUTS!!! What if I know I don't want to exercise the call? Do I have to buy shares of a stock before I can buy a put? Doesn't that kind of defeat the pupose? I would say it is too wacky to be possible, but these days I believe anything. I guess the reasoning is that if the contracts are in-the-money by more than a certain ammount at expiration then they need to automatically exercise them. Isn't that an exchange rule? It would be better if we could sign an agreement that would allow IB to sell in-the-money options rather than exercise them. The powers that be are NOT making life easy for cash account traders.
vikana, the people that would post the link to the new code would not be available until NY hours. I've sent them a mail asking for the release. wireless, the ira rules for options are set by the regulators. i would have to guess that brokershopping is correct in the reasoning.
I commend IB for moving forward by attempting to meet the needs of the trading community. Allowing IRA accounts and covered calls in IRA accounts places IB on par with many of it's online competitors. Allowing married puts in a cash account is also a small step forward and provides Pattern Buy/Hold Investors the opportunity to protect their accounts. Unfortunately IB's policy/programming on long calls is less than desirable with the restriction on funds, especially when compared to other online brokers. The only advantage of buying a long call with IB is the management of the downside risk. Hopefully IB will see the light and rectify this policy/programming. I believe that IB has an opportunity to continue to move forward by meeting the existing policies of it's chief competitor for customers that desire the ability to trade options in an IRA or cash account, specifically Dreyfus (www.edreyfus.com). I have my IRA with Dreyfus and they allow married puts plus long calls and long puts without the restriction of funds or shares. The commission is $12 minimum / $1.75 per contract, which is relatively reasonable. I wish IB continued success in moving forward to meet the needs of the trading community. Adios amigos.
def - please clarify which regulation prohibits IB from allowing a long call in an IRA account unless it is "restricted" ? I agree with NeutronJuan - surely if Dreyfus allows such trades without restrictions - IB can do the same. Both IB and Dreyfus are members of the NYSE - so the same regulation would apply to both.
i just assumed that the margin requirement on a long call in an IRA was a regulatory issue. I have to admit, it makes sense if you think like a regulator. i'll enquire. soros: i checked up on your comments - the ommission of german/swiss stocks on the account forms is an error. for those who sign up for a multi-currency or euro account, access to those markets is available now. it should be corrected on the web site shortly. also, matif/monep/euronext: french and italian stocks will be added in the future. i am told 3-6 months. just because the firm has access to a platform doesn't mean it is so simple to offer access for clearing accounts (retail). there are many considerations that must be covered on the regulatory and clearing side before access can be granted.
i heard back from the states on the IRA long call issue. turns out the wording on the newsletter was not clear. Here's the info: "You can buy calls & puts and do covered calls. No covered puts as this would require margin and margin is not allowed by the law. The web site is very clear on this." the comment to me implies you'll have to pay the premium of the call. if i hear otherwise (and I've asked), i'll post.
def - thanks for the clarification on options ! That is very good news for those of us with IRAs/cash accounts.
Yes, that's very good news. Now I just need to figure out how to make money trading options... Thanks once again Def!