Option Selling advice needed

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jhaughey

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Hello all, any help would be greatly appreciated...

Which brokers provide the facility to write options? What is the minimum account size? Do they consider spreadbetting as experience? Will they only allow you to write options that are covered by long positions?

thankss
 
Just so you don't think you're being completely ignored.

My experience extends only to UK spreadbet firms and US stock and options brokers.

I am aware that some people use ODL Securities for UK Options and are happy with it. Some say commissions are a bit steep for small trades. I don't know what authorisation policy is for naked selling, short straddles etc if thats what you want to do.

US brokers mostly use a standard 5 level authorisation system. Can't remember all the levels but level 1 gives you long calls and puts and covered calls. By level 3 you can do vertical spreads but still not naked selling or short straddles/strangles. Authorisation is based on prior investment/trading experience including stock and futures trading. You will answer a few basic questions on the application form and they will decide your level. Maybe some negotiation if you want to go up a level. They will probably say "Spreadbetting - what's that?".

One exception for US is thinkorswim who I believe have a fairly open authorisation policy based on margin requirements. Basically if you've got the margin in your account you can trade petty much what you want. They have good software tools and education materials on their site. They do not compete with discount brokers on fees if you want to trade stocks as well but for options alone they are not too bad I think.

Best of luck

Gareth
 
garethb said:
Just so you don't think you're being completely ignored.

My experience extends only to UK spreadbet firms and US stock and options brokers.

I am aware that some people use ODL Securities for UK Options and are happy with it. Some say commissions are a bit steep for small trades. I don't know what authorisation policy is for naked selling, short straddles etc if thats what you want to do.

US brokers mostly use a standard 5 level authorisation system. Can't remember all the levels but level 1 gives you long calls and puts and covered calls. By level 3 you can do vertical spreads but still not naked selling or short straddles/strangles. Authorisation is based on prior investment/trading experience including stock and futures trading. You will answer a few basic questions on the application form and they will decide your level. Maybe some negotiation if you want to go up a level. They will probably say "Spreadbetting - what's that?".

One exception for US is thinkorswim who I believe have a fairly open authorisation policy based on margin requirements. Basically if you've got the margin in your account you can trade petty much what you want. They have good software tools and education materials on their site. They do not compete with discount brokers on fees if you want to trade stocks as well but for options alone they are not too bad I think.

Best of luck

Gareth
Click to expand...

[Hi Gareth!
I see you have experience in option driding maybe you can advise me the best source of free or not experience information about the strategies of renting shares to option buyers? Do you know anything about Mt. Vernon Research Advisor Lee Lowell and his Smart Options e-Report, How to Receive Instant Cash Payments. If yes any information about this would be highly appreciated. Do you have any experience your self in selling naked option, renting and writing options? I need a mentor who can teach me how to do this do you know any good one? Thank you for your time!
If you can send me reply to my email: [email protected]
 
info

Most retail options brokers will make you fill out a form to determine your options experience. Using this form, they will then assign you an options level of 1-3. Depending on your level, you will have access to certain trading activities. Level 1 is basic stuff like going long options, level 2 is somewhat more advanced and Level 3 let's you do pretty much what you want. So, whether or not you can naked short options and how much margin you need really depends on your options level and your broker.
 
I use interactive brokers. very cheap, full access from the start.. just answer a few questions.

I mainly write options conservatively for income through the year, then once or twice a year, on obvious tops or capitiulations, I buy options 6-12 months out to take advantage of the rebound.

I like IB because the allow stops on options. Apparently some brokers don't. The one thing I would like to see is live open interest information for each individual contract... that' far more important to me than greeks, black scholes and the rest of the mathemetical stuff... I know theta is my friend :), but that's all i care about.
 
jhaughey said:
Hello all, any help would be greatly appreciated...

Which brokers provide the facility to write options? What is the minimum account size? Do they consider spreadbetting as experience? Will they only allow you to write options that are covered by long positions?

thankss
Click to expand...

Hi jhaughey,

Any broker that deals in options will provide the facility. If you are going to write options then you need to have adequate cash in your account for margin requirements. I think that Spreadbetting will not be considered as experience but you must ask to find out. They will allow you to write any options once you have enough experience, but more importantly enough cash in your account to cover the margin requirements.

I hope this helps you.

PTT3
 
Like Fildi101 I use IB, but you and other readers may be interested to know that Sucden (based in London) provide free introductory training courses on options, which are held at Euronext Liffe (www.sucden.co.uk). They do not, however, have an online platform for options, but have recently released one for CFDs, futures, equities and forex.

Charlton
 
Charlton said:
Like Fildi101 I use IB, but you and other readers may be interested to know that Sucden (based in London) provide free introductory training courses on options, which are held at Euronext Liffe (www.sucden.co.uk). They do not, however, have an online platform for options, but have recently released one for CFDs, futures, equities and forex.

Charlton
Click to expand...

Hi Charlton,

I have recently taken an interest in the UK Options market. Thanks for the details about the UK broker and Euronext. I will look it up.

PTT3
 
theta

fildi101 said:
I use interactive brokers. very cheap, full access from the start.. just answer a few questions.

I mainly write options conservatively for income through the year, then once or twice a year, on obvious tops or capitiulations, I buy options 6-12 months out to take advantage of the rebound.

I like IB because the allow stops on options. Apparently some brokers don't. The one thing I would like to see is live open interest information for each individual contract... that' far more important to me than greeks, black scholes and the rest of the mathemetical stuff... I know theta is my friend :), but that's all i care about.
Click to expand...


Hi, any chance to elaborate how you made friend with theta?
 
Most brokers will allow you to trade options but you will need to be approved. To selling covered calls only requires level 1 authorization which is easy to get. You could check out these:

optionsXpress
TD Ameritrade
Scottrade
TradeKing
 
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