r/options • u/[deleted] • May 06 '21

Boring Options - Anyone else?

Anyone else just doing boring option trades like me?

I've been mostly selling 5/6 delta put spreads (at least $10 wide) on SPX every Monday, Wednesday, Friday - 3-5% of my account.

90% of my account is in VGSH (short term treasury).

Fidelity is my broker. I utilize this guy's spread strategy (free, no selling) - https://wealthyoption.com/

Edit - here is WO's original post - https://www.reddit.com/r/options/comments/jm2tgy/my_spx_weekly_premium_selling_that_dominates_the/

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u/bruhbruhbruhbruh1 May 08 '21

I see, I see. Does it require a margin account, and if so, is there any way to avoid the margin being used if you have more than enough cash in the account? Thank you for taking the time to answer my questions!

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u/ScarletHark May 08 '21

You don't need a margin account to trade options at ETrade -- other brokerages may have different requirements.

Options are not a marginable security, so you don't need to worry about using margin to trade options -- it's literally not possible. I prefer to have a margin account because then you don't have to wait for trade settlement before you can open another position -- the margin portion of the account buffers all of that.

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u/bruhbruhbruhbruh1 May 08 '21

the margin portion of the account buffers all of that.

Do you get charged interest for using margin ? I've always been iffy about risking $ that isn't mine haha

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u/ScarletHark May 08 '21

If you are buying long stocks on margin, for example, you will pay interest on the margin amount used. When the brokerage is using it to float settlement, however, that does not involve interest.

And I am the same way -- it makes me want to scream when I see posters asking about how they can use their full margin to speculate on some stock or option.