You are viewing an obsolete version of the DU website which is no longer supported by the Administrators. Visit The New DU.
Democratic Underground Latest Greatest Lobby Journals Search Options Help Login
Google

Reply #121: requires an option account.. outrageous is putting it mildly [View All]

Printer-friendly format Printer-friendly format
Printer-friendly format Email this thread to a friend
Printer-friendly format Bookmark this thread
This topic is archived.
Home » Discuss » Topic Forums » September 11 Donate to DU
BrokenBeyondRepair Donating Member (642 posts) Send PM | Profile | Ignore Thu Jun-29-06 07:08 PM
Response to Reply #37
121. requires an option account.. outrageous is putting it mildly
:banghead:

A margin account is a type of brokerage account that allows you to take out loans against securities you own (sometimes called a "Type 2" account). Because the brokerage house is essentially granting you credit by giving you a margin account, you must pass their screening procedure to get one. Even if you don't plan to buy on margin, note that all short sales ("Type 5") have to occur in a margin account. Note that if you have a margin account, you will also have a cash account.

An option account is a type of brokerage account that allows you to trade stock options (i.e., puts and calls). To open this type of account, your broker will require you to sign a statement that you understand and acknowledge the risks associated with derivative instruments. This is actually for the broker's protection and came into place after brokers were successfully sued by clients who made large losses in options and then claimed they were unaware of the risks. It's my understanding that otherwise an option account is identical to a margin account.

:toast:

Printer Friendly | Permalink |  | Top
 

Home » Discuss » Topic Forums » September 11 Donate to DU

Powered by DCForum+ Version 1.1 Copyright 1997-2002 DCScripts.com
Software has been extensively modified by the DU administrators


Important Notices: By participating on this discussion board, visitors agree to abide by the rules outlined on our Rules page. Messages posted on the Democratic Underground Discussion Forums are the opinions of the individuals who post them, and do not necessarily represent the opinions of Democratic Underground, LLC.

Home  |  Discussion Forums  |  Journals |  Store  |  Donate

About DU  |  Contact Us  |  Privacy Policy

Got a message for Democratic Underground? Click here to send us a message.

© 2001 - 2011 Democratic Underground, LLC