Noob question: Synthetic Naked Call

Discussion in 'Options' started by Longcat1982, Sep 8, 2009.

  1. Suppose u don't have the margin available to sell naked calls.. so u do the following:

    Have 2 brokerage accounts.

    In one account, short a stock

    In another account, buy the stock and sell a call on it (covered call.)

    Is there any regulation that explicitly forbids u from doing this?
     
  2. spindr0

    spindr0

    Margin for an option is less than that for stock so if you have the margin to buy and short stock, it makes no sense.

    If you do not have approval for naked shorting then your idea would work but it's not a good one. Commissions and slippage would eat you alive.
     
  3. MTE

    MTE

    If you are not approved for naked selling then why don't you sell a spread!?