Options Trading Question

KaiserG13

Newbie
Messages
1
Likes
0
Hey everyone, I am new here and had a few questions about trading options. I have most of my portfolio with SmithBarney but im gonna take a portion of it out and do some swing trading with a discount broker and maybe some options trading.

I know I will be able to sell covered calls but can I sell puts without some higher authorization? I would only do this starting out in stocks that I would like to own at the strike level and collect the premiums if it doesn't come in or buy back the put to close out.

My question is about the capital requirements associated with selling the options. Say if I sell 1 contract CHK Nov 20 Puts @ 0.60 and collect $60 (ex Commish) do I have to have the money in my account to purchase CHK @ 20 ($2000)? or just enough to buy back the put? I understand that the stock could fall below 20 before expiration and I be assigned, so I assume I will have to have the funds to cover buying CHK @ 20. Just wanted to see if that truly is the case because I would like to do more than 1 contract at a time and need to figure out how much capital or margin I need. Thanks for any help you can give me.
 
Top