Help With Selling Naked Put

[wheezer]

Hi guys,

I'm brand new to options trading and would love some help.

I'm currently using CBOE.com's VirtualTrading to practise, with a strategy to sell naked puts until exercised, then write covered calls once stock is delivered.

I have $25,000 in this account. I sold 2 LMT Sep13 @120 Puts and am now open in this position. Considering I would buy $24,000 worth of stock if exercised, I am confused to see the broker account has only taken $5,000 off my available option buying power (now at $20,000).

Am I missing something? Seems like a lot of leverage for a naked position...

Thanks for your help.

 

[CityMasterTrader]

Hi guys,

I'm brand new to options trading and would love some help.

I'm currently using CBOE.com's VirtualTrading to practise, with a strategy to sell naked puts until exercised, then write covered calls once stock is delivered.

I have $25,000 in this account. I sold 2 LMT Sep13 @120 Puts and am now open in this position. Considering I would buy $24,000 worth of stock if exercised, I am confused to see the broker account has only taken $5,000 off my available option buying power (now at $20,000).

Am I missing something? Seems like a lot of leverage for a naked position...

Thanks for your help.

Hi wheezer,

It shouldn't be like that though I haven't done any trading with them. Did you ring them about this matter?