As was Fury.

I had a phantom SENS buy hit @ 2.85

Sure.  Why not?  They could be the main lidar supplier to several of the major car companies and sitting at a $300 pps by then.

I paid .087

or they could be defunct. I certainly hope not, but it's not outside the scope of possibility

I thought it was funny.  

One of my DPLS buys, I fat fingered the decimal.   There was that milli-second moment of sheer terror right after I hit submit and saw it post to my open order tab...luckily I don't have $5.3 million in cash sitting in my account so it rejected my order...but it's amazing how fast images and information can go through your brain.  There's no way I can financially recover from this...

Question for margin guys.

Vanguard account with margin.

I’ve about $20k in puts that are right on the verge of being assigned due to the last couple red days.

My available balance (settled funds) is $5192.

“Funds available to trade” = $365k

“Buying power” = $730k

Does this mean that if the puts are assigned, the costs will be absorbed through “funds available to trade” (basically a margin buy) on the portion of the costs that are beyond my settled funds?

Or, is it best that I deposit 20k and deal with it that way?

I don’t THINK I’ll be margin called because of my buying power...but.

I lied, looks like it was actually $2.84.

Hey, what ever makes sense.  Or cents...or SENS...  or what ever!

Dpls .0798

Attached File

*days

It usually doesn't start barcoding until after lunch but it looks like it's going to be early today.

Value of the PUTS should already be factored into your available margin; no way a broker would let you have $20k of potential debt not factored in/

In etrade they show on my 'margins' screen and are added into the requirements, reducing my purchasing power by the cost to buy them.

If assigned, you should have cash cleared out and be negative $15k (ie on margin)

who else is buying mvis dip? Im tempted to throw another $500 at her. someone stop me.

I'm selling puts and buying calls and buying back calls I sold

Thanks.

Now, I purchase those calls on margin...I don’t actually own them.  Vanguard is HORRIBLE when it comes to UI, so it’s hard to navigate around to see what’s going on.  I would expect those shares would be marked as “on margin” in some fashion, and that would be deducted from my eventual sell price when a sell occurs.

I need to transfer my Vanguard brokerage over to my Schwab account in the near future.

Best way to be sure is to call the broker.

Generally, if you were to be assigned on short puts, your cash balance would be consumed first.  Assuming you have a $20k liability out there (strike price of $10x 20 contracts perhaps?), if your cash is insufficient, then you go into your margin buying power.  Brokers will use similar terms differently, so again, call Vanguard.  

The net of this is though, either your $365k or $730k is more than sufficient to cover the assignment.  If you're assigned and it goes as I described, you'll have an outstanding margin loan for the difference between your cash balance and the assignment price (strike x number of contracts assigned).  You're okay here, just realize you're paying margin interest.  You have covered your obligation, and could sell the shares, sell other holdings or deposit cash to extinguish the margin loan (or continue to hold everything, keep the margin loan and pay the margin interest.)

The margin call will happen when your equity in the account is below the required amount.  25% is minimum for the Fed, but house margin requirements are often higher and thus take precedence, and often positions have different minimum equity requirements - so I can't say exactly what that threshold is - call your broker.  (You'll usually know because your buying power is based on how much you could borrow over the minimum equity requirement for the account...again, ask the broker which number you should watch/trust if you're going to keep the margin loan outstanding).

If you're below the minimum equity, then you're in a maintenance call (most often referred to as a margin call, although there is also an initial margin call = Reg T call/Fed Call, which has to do with minimum equity requirements at the opening of a position), and the broker may take action to remedy the situation.  Based on what you described, even if everything was assigned right now, you would not likely be in a maintenance call.  HOWEVER, since I don't have a full picture, DON'T TRUST A WORD and call your broker.  

That puts me in moon lambo territory. But lets be realistic, that prob isnt going to happen.

$2.85 now. Good buying opportunity or for selling some 8/20 $2.50 puts for $10. It all adds up

Let's say you bought mvis at $.30 can walk away with $4 a share right now that is yours. And in a year and a half you either get $40 a share or you get to sell calls again. And make more free money.

Thanks, your knowledge never ceases to amaze.

Sooooo...call my broker?    I caught the hint.

When I was approved for cash-secured puts, that required level 3 from Vanguard...which others across the internet also feel is ridiculous.

So I only planned on cash-secured and now I’m blessed with margin.  Or cursed, since it can go that way if one isn’t careful.

When I was approved, I saw the two figures mentioned above. “Available to trade” and “buying power”.  

So after selling a covered call and then buying to close and reopening a new call sell position I received the famous good faith regulation T violation warning so I called Vanguard customer service to discuss that...since I wasn’t planning on “selling to close” the later strike I didn’t think it applies to me.

So to make a long story longer, obviously the original customer service rep couldn’t help me.  I was forwarded to the options desk or what ever they call it, and the guy said “it looks like you’re safe, you have a lot in your account”.  I grilled him more about what those numbers meant, and was transferred to yet another individual who said my trade “probably wouldn’t violate”.  Again, they seemed as confused as I was about how Vanguard goes about it all on the website.

I’ll call them again on my day off and discuss the concerns about which number actually constitutes my margin.  We’ll see what they say.

Of these Puts are assigned, I’m happy to own the stocks at that price. Might be interesting so I can see how it all appears on their website.  I do need to get this account switched over to my schwab soon.

Thanks again for your help.

$BVXV had a good run today. I sold 2/3 of what I had at 3.97 😀

I will buy back if it drops back below 2.85

Haven't seen that one.

You're an absolute asset to this thread!

How do you know all this information?  Are you in the industry?  You're able to just type it out like someone who intuitively understands.

It would go against your buying power and funds available to trade mostly.  Be put on margin.  

I doubt they get exercise before the expiration day.  If you don't want the shares just roll them out.

How far out are you buying calls?

SENS: I wish I wasn't scared of Puts. I don't know which thing (buying or selling) gets you on the hook to buy the stock at strike at expiration.

That is very wishful thinking.

For those of us who got in too late, we need to accept that MVIS is not going to get us a moon lambo. I got in a few months back and have been holding and buying dips. It has been a fun ride and I have been up a lot of money(for me) from it, but it's very unlikely it gets anywhere near 300 and you'll be missing out on a lot of opportunities waiting for that.

Or WSB could get it to 300 next week. That's what makes it all so fun.

Yeah I make money on it but not retirement money lol

Yeah, the call your broker thing is really to make sure you're getting the best info from someone who can see the full picture of your account.  Unfortunately, some of these things are like asking "what wrong with my engine, it makes a screeching sound every third Wednesday at high noon, and how much will it cost to fix?"  The worst thing that could happen is you receive incomplete (and thus, bad) information and make a decision based on it, so as much as it can be painful to try and get the satisfying answer, the source is really the best option.

If you're searching (which is sad, IMO) for the best person to talk to, perhaps try reaching out to their margins team, and ask what the difference between buying power and available to trade are, and how they're calculated/influenced.  As I sort of assumed, based on the numbers you gave and this one outstanding obligation, if you got into a maintenance call, something went reallllly wrong (as the reps said), but it is kind of the lazy answer and not as specific as it could be.  If you get something similar, perhaps have something like "Ok, but I'm considering increasing my position significantly, and I'd like to know how much I can do so" to try and force a more specific answer.

The other component is how they're calculating the numbers.  For cash secured puts, it's usually a 1:1 reduction in what's available in the account from cash/buying power.  If it weren't a margin account, it's an easy answer.  Once margin and other positions are in play, and their house equity requirements, it becomes much more difficult to pinpoint accurately because there are so many potential moving pieces.  One big example of what could cause issues would be if you have a pattern day trader tag on the account, in which case the day trading buying power and the margin buying power are very different calculations/ratios (one is 4x leverage for positions not held overnight, but the other is less)....so which one are you seeing??  

So, sorry for the long winded excuse of an explanation, but that's why the "call your broker" really is the best answer.  Now it's up to them to be helpful.

I really should proof read.  And not type while driving.

Selling gets you on the hook to buy at expiration. You've sold someone the option to sell you shares if the pps drops below the strike price.

I sell puts for what I'm comfortable owning the stock at. I've sold five contracts so if the strike is below $2.50 on 8/20, I'll be the proud owner of 500 more SENS shares at $2.50 per share.

Edit: what I'm not sure about is how the cost basis is calculated if the puts get assigned. Curious if the gains from selling the puts are factored into the cost basis (reducing it) of the 500 shares or if they're accounted for as two separate transactions. Don't think I've been assigned yet so can't check my account for an answer.

You'll end up being in one of those ditches.

I’ve had RIOT and GDXJ Puts assigned, and Vanguard factors in the premium to that specific block that’s assigned.  

I would think the same applies to Calls, but I’ve been wrong before.

Assigned puts should have the strike price reduced by the premium received to give you the net cost basis for the shares to calculate gain/loss against when you sell.

For example, if you sold a SENS $2.50 put for $0.50 premium, your net cost basis should reflect as $2.00.  If you then sold the shares for $4.00, you'd have a $2.00 gain per share to pay capital gains on.  Conversely, if you sold the shares for $1.50, you'd have a $0.50 capital loss to claim.

Do I have to have the cash in the account to sell the put or just when it’s getting close to the end of the term?

And how do I sell the contract when it’s up over $4 (my call strike price I already sold).

Wait is this how you make money both ways?!?

MVIS Aug 20 $13

Anbody in TLIS?

I'll drive out.  

You have to have the margin available to buy the shares.  But you aren't actually using it.

MAVIS just drives you crazy.

MVIS down 4.55%
LAZR down 2.54%
VLDR down .25%
AEVA down .13

all Lidar down but MVIS definitely got the worst of it.

MSFT beat earnings...down 9 dollars in AH

So does it have to be free capital in the account or does having other stocks in the account work?

Depends on the stock. Needs to be a "marginable security"
SENS and DPLS won't cut it Apple and Microsoft will

It works off of margin. If you have margin available because of the other stocks it will work.


I've sold a bunch of puts as my only margin balance while I own stocks too that are 100% cash. My margin balance is high but it says none of it is subject to interest because I don't really own the stocks the puts are linked to.

ME, MVIS and SENS really stepping up today.

Yep. Get some good bullish news and it drops for the day..

This has been happening a lot.  The market is irrational.

Moar buying opportunity.

Months from now there will be hundreds of posters saying they wish they bought more.