Question on selling options

Discussion in 'Options' started by LAtrojan, Dec 15, 2009.

  1. LAtrojan


    Hi all -

    Do we earn interest on the proceeds of a short sale of an option? For example, if I were to sell a Jan11 option for say $500. Do I earn interest on the $500?

  2. depends on the broker. right now i dont know of any brokers paying interest on cash balances of any kind.
  3. Fidelity rolls cash from retirement accounts into cash reserves (FDRXX). It's 1 year performance is .77%. For brokerage accounts cash is rolled into FCASH which is paying .07%.

    - Ray
  4. johnnyc


    depends, is the $500 being used to meet the margin requirement? If so then most likely not. If you had the margin requirement beforehand and the $500 is free cash then you should be earning interest on the proceeds, but probably not a hell of a lot these days