Possible?!

Discussion in 'Options' started by cigarno, May 17, 2010.

  1. cigarno

    cigarno

    Example: you short 100 Citibank shares at (Interactive Brokers) and you write a naked put for 100 shares of Citibank at (MF Global). You get assigned for you put position. Can you use your naked put position at (interactive brokers) to cover your short position at (MF Global)?!
     
  2. MTE

    MTE

    No. At least, it cannot be easily done.
     
  3. cigarno

    cigarno

    Why not?! aren't stocks fungible?!
     
  4. 1) You may need to have some type of omnibus account to cross-deliver related positions. The positions would have to be treated as separate outrights instead of a combo.
    2) If "C" rallies, IB may hit you with a margin call on the short-shares.
    3) If "C" declines, MFG may hit you with a margin call on the short-put. :cool:
     
  5. cigarno

    cigarno

    Thank you Nazdac
    So it is possible?! ......My understanding is that Omnibus accounts are there to allow you to hold short and long positions simultaneously at the SAME BROKER
     
  6. I do not completely understand that type of account, only that it might be what you need if you're going to "juggle" positions with more than one broker. :cool:
     
  7. Why would one do this in separate accounts in the first place?
     
  8. money laundering?
     
  9. LeeD

    LeeD

    1) As a backup in case one of the brokers has technological problems
    2) To hide the actual position from both brokers
    3) There may be some commisssion/liquidity considerations... like one broker may offer pre-market size for stocks while the other broker is generally cheaper.
     
  10. If a person feels there is any chance of that, get a different broker IMO.

    2) To hide the actual position from both brokers[/QUOTE]

    100 shares of Citigroup????? IMO

    3) There may be some commisssion/liquidity considerations... like one broker may offer pre-market size for stocks while the other broker is generally cheaper. [/QUOTE]

    Way too much work for a tiny savings. IMO :)

    This reminds me of a guy who for some reason wanted to go long and short the same stock at the same time for the same number of shares. There is no reason to do so, but you could open different accounts and do it (assuming it's legal). There is really no good reason to do that however.

    JJacksET4
     
    #10     May 17, 2010