Leave a Comment:
1 comment
SGX can easily overcome the danger of naked options selling with following rules:
1) Trader must have min. $25K in a/c.
2) Once holding a naked sell option & market against him/her up to 90% of his cash a/c, his/her trade will automatically be closed out. For any subsequent new trade, he/she will again top up his/her a/c with $25K.
Of course the initial trade of such naked sell options can only use max 50% of the cash a/c. So, all sides are well covered.
Reply