Binary Options Cboe - More Options Trading Strategies Allowed in Retirement Accounts

Jan. 14, 2011 - PRLog -- Binary Options Cboe

Traditionally, margin accounts were needed in order to trade options. The reason is because margin provides credit collateral against losses. Although buying a put or call has a fixed maximum loss, some options strategies such as naked calls subject the investor (and possibly the brokerage house) to the possibility of unlimited losses.

Why Brokers Used to not Allow Options in an IRA

In the past, brokers would not permit any options trading at all in an IRA account. Others would do so but only with covered calls. There are several reasons for this. One reason is because the broker could get sued for recommending inappropriate investments for their clients, especially in a retirement account. Another reason is that options trading did not generate any more profits for the brokerage house. Finally, even if a brokerage wanted to allow clients to trade options, it would have to develop controls and systems that prevented any customer trading from causing losses to the broker. Get Internet #1 - Binary Options Cboe @ http://tradingcure01.webs.com and be Successful forever!

Options in a IRA Retirement Account

Today, some brokers are much more comfortable in allowing customers to trade options in their IRA account. The types of options strategies allowed depends on both the brokerage house and the IRA custodian. With some risky trading techniques such as writing naked calls and puts, it may be extremely difficult to find a custodian willing to entertain such risks.

Nevertheless, more and more brokerage houses are allowing clients to trade options in an IRA. Depending on the brokerage house, the client may be required to put cash collateral for some options strategies.

Investors should exercise extreme caution before trading options, especially in an IRA. Options trading is not appropriate for many investors. Options trading involves substantial risk and may result in the large financial losses. Consult the CBOE options information or consult a financial adviser carefully before investing. Get Internet #1 - Binary Options Cboe @ http://tradingcure01.webs.com and be Successful forever!

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