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11 Secrets of Naked Option Writing

Here's what you need to know before you get naked

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#9 – Write Options Against Treasury Bills


Top 10 Options Trades for 2011

When writing options, you must put up a margin requirement. The margin requirement can be in the form of cash or securities. It can be also be in the form of Treasury bills.

If it is the form of securities, you can only use the loan value of the securities. However, Treasury bills are treated just like cash, and this is one major advantage of using them.

Treasury bills will generate from 2% to 10% annually, depending on the money market, and this will be an added dividend to your option writing portfolio. Not only will you generate the profit from option writing, but also you will generate the return each year from your Treasury bills. Most brokerage houses place your credit balances in the money market, so you will still earn interest if don’t have Treasury bills.

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