Replies to post #43082 on A.I.M. Users Bulletin Board (AIMUSERS)

[Toofuzzy]

Hi SF

First, if I have no cash in my account and SELL a PUT both Fidelity and TD AMERITRADE will charge me margin interest of like 8% on my POTENTIAL obligation. Makes no sense to me and pissed me off when it happened.

Second, think of buying deep in the money calls as buying on margin without paying margin interest.

Third, normally if you buy a $20 call on a $34.05 stock it should cost MORE than $14.05 so the price of $13.95 would allow you to buy the stock at a discount immediately. All the open interest would be called.

Whether you own the stock or own calls, if it goes down, you lose the same money, but with options you have more cash to buy more with.

Toofuzzy