Lightwave Logic Inc (LWLG)

[nsomniyak]

Here's the problem. I had common shares (not LWLG in this case) and wrote call options against them for income. Covered call position - extremely low risk. However, the fact that the shares were involved in a covered call position did not prevent Schwab from lending them out - on a practical bases this means they moved the common shares to a separate "shadow" account - leaving me with a NAKED short call position (extremely risky, especially on a stock I felt was going to go up eventually, in my main account! This meant that while my common shares were safely in the shadow account, I ran the risk of getting margin calls in my base account if the now-naked short calls moved against me.

In my IRAs, the basic terms of an IRA account, which do not allow naked short call positions, prevented Schwab from lending out the common underlying my covered call positions and creating a naked short position there.