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Help with covered call using Commsec!

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BrightGreenGlow

BrightGreenGlow

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Hey guys,

Just did my first Covered Call with Comsec. I wanted to ditch my BHP shares and thought I'd offer $0.295 for a March 2010 call ($43.00 execute) to get a quick buyer. So the trade was bought on the 2/3/2010. All seemed ok, BHP has risen a little which I don't mind. Selling them at $43 is still gaining me a 8k + profit.

Comsec sends out an email everyday which seems good but I noted that I seem to be owing them nearly $2,000? I have never used borrowed money for shares.

The screen from Comsec looks like this....

Date Description Debit Credit Balance Initial Margin Collateral Cover Excess/Shortage
01/03/2010 Brought Forward Balance 0.00 CR
02/03/2010 S 1 BHPDM @ 0.295000 $43.00 CALL OPTION EXPIRING 25-Mar-2010 258.62 CR 258.62 CR
02/03/2010 Cash Margin on 02/03/2010 1,623.57 DR 1,364.95 DR 1,623.57 DR 0.00 CR 1,364.95 DR
03/03/2010 Cash Margin on 03/03/2010 391.73 DR 1,756.68 DR 2,015.30 DR 0.00 CR 1,756.68 DR
TOTAL: 2,015.30 DR 258.62 CR 1,756.68 DR

Can someone please advise me... what's this $1,623.57DR and $391.73DR. What am I being charged for?? I tried to ring them but it was too late in the day. Ill try again tomorrow. All i wanted to do was sell the 1000 shares I own at $43, collect my Premium (which hasnt come through yet) and trial Covered Call writing.

Thanks in advance guys!
 
just a guess but comsec options division probably dont care what shares you own. You could sell your shares tomorrow and keep the option open. Therefore they want some security. You need a better suited broker imo. I buy puts on my margin loan and because my options and shares are looked as a whole i'm never margin called.
 
Thanks Ardyne,

I dunno if that's true though, because I cant sell any BHP shares because I had 1,000 "Available" and now 0 Available with 1,000 "Reserved". :( Maybe the $1,756.68DR is what I would owe if I Closed my Option? :( :( I'm frustrated.
 
im on my phone so i cant get a good look at this thread but i reckon its a temporary margin but i dont know. you have the shares so the worlds not going to end, chillax and call them tomorrow. Maybe you might have to come up with the cash until it expires.......better call mum :)
 
Haha, if only Mum would help..... :(

I don't understand why I would have to pay a margin if all I'm doing is selling what I have. :S
 
Hi John,

Before you get all worked up you need to lodge collateral in the form of stock or they start pulling cash out of your bank account to cover margins.

Give them a call tomorrow.

BTW before laying on a position, check the spreads, $0.295 was a little low. :)
 
Hi Cutz,

Would I be correct in saying that the 1,000 BHP shares I have in my portfolio is the exact collateral I need? They have taken them away from me so why the need for what seems to be a $2,000 margin sum? :S Just got me a bit annoyed. :(

PS: Yeah :( I shoulda gone higher with the Premium.
 
John,


Just realized that you may have done the trade yesterday so the price was probably fair.

The amount of BHP stock you have is enough to cover, as I said you need to ring them up, tell them you want to lodge some stock if you haven't already done so.
 
I've done a lot of covered calls with commsec and I had the same query myself when I got my first statement saying I owed money.

That is the margin for the day you would have to pay if you had of sold a naked call. It's only because your stock hasn't been held as collateral yet.
 
builder2818 said:
I've done a lot of covered calls with commsec and I had the same query myself when I got my first statement saying I owed money.
Click to expand...

Hi Builder,

Are you still doing covered calls with commsec ?

If so do you cop many assignments, what size lots are you trading and what are your thoughts on the assignment brokerage ?
 
I haven't done any since late last year. I was never exercised until expiry day even with a terrible trade I did with CBA and I was in the money over $5-6.

I wouldn't be trading that much though(because of the amount of capital I have) but it would be anywhere between 2-10 contracts based on the stock of choice.

@Naked Shorts, yes they do suck but its convenience having all my accounts set up with them.
 
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