17 Comments

  1. Ken on June 11, 2009 at 12:53 am

    May I ask what “option friendly broker” did you switch too? Also is there some difference in requirements for selling and buying options between a traditional ira versus a roth ira, because you said you switch your ira.

    Thanks,

    Ken M.

    • Genius on June 13, 2009 at 2:45 pm

      In terms of selling options a Roth and a Traditional IRA are both the same. You can do these trades in both if your broker allows it.

      You can ask who my broker is, but unless you are a member, I won’t tell you. 🙂

    • Steve on September 2, 2012 at 11:13 am

      I am wondering the same thing. Who are you trading with? And I am not a subscriber. I came across your site looking for a BD that would let me do these’s in an IRA.

  2. Ken on July 29, 2010 at 10:32 pm

    This may sound like a dumb question but I don’t understand why one would want to sell call options when they can buy puts (and limit risk) if they are bearish on a stock?

    • Genius on July 30, 2010 at 10:59 am

      Ken,
      If you can predict the direction of the stock, how much it will move, and by when, then buying a put is your best bet. If you miss on any of those three you lose.

      Or, you can just sell a call OTM and as long as the stock does not end up above your call price on expiration you make money. The stock could go down, do nothing, or even move up a little. You have a lot more room for error, and you get to play the part of the house/casino instead of the gambler.

    • Robert on April 16, 2016 at 1:05 am

      Theta is the answer. Time decay always favors the seller, but not the buyer of an option. If you sell call or put options with only 15-30 days until expiry, it is pretty easy to win consistently as long as those options are sufficiently out of the money. Much easier to make money doing this than buying puts.

  3. Fred Robertson on August 26, 2010 at 6:36 pm

    Does your broker allow you to sell naked puts in your IRA/Roth? If so, do you need to have enough cash set aside in the account to cover your put sell in case you are assigned the stock? My understanding is that you cannot have margin in an IRA or Roth. Is this correct?
    Fred

  4. Thomas Zhang on September 4, 2010 at 7:06 pm

    Fred,I have experiences in selling naked puts in retirement accounts.I did quite bit of selling,namely cash-carried puts,or covered puts.I had to have 100% fund to do the trade. For instance, I sold 3 contracts of cvs100910p70 not too long ago. I got a credit,but they held $21000.00 for maintenance until I closed the position..I intended to purchase CVX below 70 for a bargain if I could get,but if not I would get an income.The risk is if CVX has a free fall like BP, it would be a disaster for me.

    Therefore,it depends on your plan.Naked put selling is usuallly a way to purchase a quality dividend stock at a lower price. If you simply want income, maybe sell a put spread and some brokers like Fidelity and Opitionshouse allow you to do spreads in a retirement account.

  5. Ewald Wuschke on September 14, 2010 at 2:22 pm

    For Canadians, holding most types of options inside a Registered Account is a problem though. My broker would love to have all types of options inside Canadian Registered Savings Accounts (RRSPs, RESPs, TFSAs) but only permits purchase of Calls and Puts and writing Covered Calls due to Canada government regulations. I am surprised that the broker can do that much inside Registered accounts, because Section 22 of Canada Tax Interpretation Bulletin IT-320R3 specifically states that the purchase of a put inside a registered account is NOT a qualified investment. Buying Calls is permitted because they give you the right to acquire property. Buying Puts is supposedly not permitted because they give you the right to dispose of property, and registered plans are not supposed to hold investments that only give the right to sell (dispose) a property.

    • Genius on September 14, 2010 at 7:40 pm

      I cannot say anything about Canadian accounts because I don’t know. But brokers have been lying to their customers in the states for a while now about what can and cannot be done in an IRA.

  6. Peter B. on January 16, 2012 at 1:05 am

    Schwab is option ignorant. They refused to authorize Covered Call option selling in a non-IRA account for an associate. Almost any broker is better than Schwab for option trading.

  7. Aura on April 30, 2012 at 9:58 am

    I am very interested in options, and I like the way You, The Genius approach this type of trading. I’m trying to understand, but I’m still very far from doing my own trades. Is it possible to put IRA money in an your Automatic Options account? How do I transfer the money and which brokers do this type of transaction? I understand I have to be a member, but I want to make sure this can be done, before I sign up.
    You may e-mail me…this does not have to be a public answer.
    Thank you!

    • Genius on April 30, 2012 at 10:23 am

      Yes you can do these trades in an IRA account. But most of the large stock brokers will not allow it.
      You need to find an option friendly broker that is willing to let you trade your own money how you desire.
      I get really upset when people tell me they cant do these trades in an IRA because their broker lied to them and said it could not be done.

  8. Stan F on January 11, 2013 at 9:02 am

    Does your broker allow you to sell naked calls in your IRA account? If yes, approximately how much cash would you need in the account to sell 1 120 Call for $4 when the stock is trading at 100? Thank you!

    • Genius on January 11, 2013 at 1:02 pm

      No broker will allow nakeds in an IRA

  9. Deepwater on May 10, 2013 at 5:11 pm

    I’ve had no problems at all trading options in my IRAs with TDAmeritrade. Also Think or Swim is now owned by TDAmeritrade.
    Their option comission formula is straight forward and without any “gotchas”, “exceptions” or “yeah buts”

    • greg K on January 13, 2014 at 10:32 pm

      I have been option trading in my IRA mostly CSP’s and a few CC’s with TD Ameritrade for 8 months. I asked them for an upgrade to trade credit spreads, they will not give me approval!! Time to find another broker.

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