A lot of brokers are graduates from used car sales You might want to check the context of the statement from Stocks and Commodities Magazine.
Your broker might be talking about what level of option trading they have you approved for. A lot of brokers will not allow this unless you have 50k in the account and some experience.
which page and who says that. That is complete bollocks. Naked Put selling can for some underlying assets be less risky than naked call selling. Think of options on commodities. But in any way selling naked options is NOT illegal and has never been and will never be. As pointed out there is a chance that its not allowed in regards to certain account types.
not criminally liable but liable to pay up. That is the underlying point why facing the options exchange is safer than facing any other OTC counter party.
Just as much as any other leveraged trade. Put on a 50:1 forex trade and see how long your money lasts if the trade goes in the wrong direction. Not to say that it is not risky, but I am amazed at how many people think it is ok to trade 3:1 ETF's... That's leverage again, and it cuts two ways.
They are very similar to covered call except you pay less in commissions. You can always do naked put (cash secured) if your account is approved for higher level of options trading. I guess the highest level of approval allows you to sell naked put for guarentee of less than 100% of cash value (say 30%). Brokers'll lock your cash/margin for the period while your position is open. Nothing illegal about it.
The magazine article I am refering to is the oct issue of Stocks and Commodities. The Get Shorty Article on Page 44 and 45. The article states if you do not secure or intend to secure your short shares it is an illegal practice. Sorry for any misquote or misunderstanding.
Seems like they're talking about naked shorting of equities, not naked writing of options, which is illegal.