There are several important differences between an IRA and a regular non IRA account that makes speculating and gambling with an IRA account a real bad idea. Shit like Maximum IRA contributions for starters.
False choice. You can opt to speculate with a small portion of your IRA, its not an all or nothing proposition.
How did you end up long stock on being short a call spread? It seems like they exercised your long call, but you didn't get assigned on your short call. If that's the case, selling the stock above 85 puts you in a better position than having the call spread be a $5 loser.
no? provided this wasn't a time spread both sides were expiring and ITM so nothing needed to be done, right? instead broker breaks up the strategy leaving him with a long position and incurring 2 different transaction costs.
That's true, but most brokers don't try and figure out your hedge and unwind accordingly. What if he had other option positions that look like hedges, which one should the broker assume is the hedge? Unless the broker has the capability to identify hedge positions and agrees to treat them accordingly I don't see how you can claim they are wrong. If most brokers had this capability and it was the "norm" than you might blame the broker. But I'll bet very few brokers have that capability. Actually I don't know any that do and I would like to know if there are any. Don
True, but that is the same for any type of investing within an IRA. Also profits have some tax advantages especially in a Roth IRA. Don
I'm sure they can see how the position is paired, they would have to in order to determine the amount of cash he can spend vs how much they have to hold out in requirements. I know they do this in effort to reduce risk but they actually created risk in his case. What if the stock had opened 10-15 pts down Monday morning?