How to Get Approved to Sell Uncovered Puts
Most brokers don’t allow uncovered puts by default. Here’s how to get the access you need — or find a platform that will.
Why This Strategy Doesn’t Work on Robinhood
You’ve got the portfolio. You’ve got the buying power. You’re ready to build long-term exposure without tying up cash.
But if you’re using Robinhood or SoFi — or any platform that caps you at basic options access — this strategy is dead on arrival.
Collateral Compounding works because it taps into margin capacity — not idle dollars. You’re not parking cash. You’re not borrowing funds. You’re simply using the value of the positions you already own to secure new ones.
That requires selling uncovered puts.
And most brokers won’t let you do that by default. Some won’t let you do it at all.
This post is about making sure you’re not stuck. We’ll walk through:
Why uncovered puts are essential to the strategy
Which brokers support them (and which don’t)
What level of access you actually need
How to get approved — and what to do if they say no
Because if your broker won’t let you use the margin you’ve earned — it might be time to find one that will.
Why This Strategy Requires Uncovered Puts
Most people think of puts as something you buy when you’re bearish — or something you sell when you’re sitting on a pile of idle cash. That second version — the cash-secured put — is what most brokers let you do. It’s simple. It’s safe. It’s easy to explain to compliance.
But it’s not what we’re doing here.
Collateral Compounding doesn’t use cash to secure puts. It uses Reg T margin. That means your broker needs to let you sell uncovered puts — positions backed not by idle dollars, but by the margin capacity already available from the stocks you own.
You’re not borrowing. You’re not paying interest. But you are pledging a portion of your portfolio as collateral — and that requires a higher level of options access.
Think of it this way:
Cash-secured puts require you to set aside the full cost of the stock. Sell a put with a $50 strike, and your broker will want $5,000 in cash, locked up until expiration.
Uncovered puts, by contrast, use Reg T margin. Your broker sets aside part of your account’s margin capacity — often 20–30% of the notional value — while your cash stays fully invested.
That distinction is what makes this strategy work. You’re putting unused buying power to work — not sidelining capital. But it only works if your broker allows uncovered puts under Reg T.
Why Not All Brokers Allow This
A lot of brokers love to advertise options access. But when it comes to actually selling puts the way this strategy requires — uncovered, margin-based, and cash-free — many of them quietly say no.
Some just don’t support it at all. Robinhood, SoFi — these platforms are built for beginners. They cap you at cash-secured trades. You can’t unlock Level 3 or Level 4 approval because those levels don’t exist. Even if your portfolio is ready, they’re not.
Others do support uncovered puts — but they make you jump through hoops to get access. You’ll need a margin account, a high enough account balance, and the right answers on your options application. (We’ll cover that next.)
That’s why choosing the right broker isn’t just a convenience issue — it’s a functional requirement.
We built a full comparison of major U.S. brokers — who allows uncovered puts, what level you need, and how much equity they require. You can view the full table here:
If your broker doesn’t make the cut, don’t waste time trying to bend the rules. Switch.
How to Get Approved
Even if your broker supports uncovered puts, they won’t just hand over access. You need to ask for it — and more importantly, you need to qualify.
The approval process usually happens through an online questionnaire. It’s designed to screen out anyone the broker thinks might misuse advanced options — which is reasonable. But it also means if you answer “safely,” you’ll get denied by default.
Here’s what they’re really looking for:
A margin account (not a cash account)
An investment objective of Speculation or Most Aggressive
At least 2–3 years of experience with both stocks and options
A stated tolerance for risk — even if your actual strategy is low-stress
In short: you need to signal that you know what you’re doing. That doesn’t mean exaggerating. But if you downplay your experience or risk tolerance, you’ll get placed in Level 1 or Level 2 — which only allows covered calls or cash-secured puts.
Level 3 or Level 4 is the target — depending on how your broker labels it. That’s what enables Reg T margin use for uncovered puts. And without that, you can’t run this strategy.
So take the application seriously. Answer like someone who’s managed their own money through a few market cycles — because if you’re here, you probably have.
What to Do If You’re Denied
Don’t panic. And definitely don’t give up.
Broker applications are conservative by design. They’d rather under-approve than overexpose. But that doesn’t mean their decision is final — and it doesn’t mean you have to accept it.
If you’re denied access to uncovered puts:
Call or message your broker. Ask them to review your application manually. Let them know you’re looking to use Reg T margin to run a structured put-selling strategy — not YOLO trades or deep leverage.
Clarify your intent. You’re not trying to speculate wildly. You’re managing risk carefully, using unencumbered buying power to build long-term equity exposure.
Remind them you’re the customer. If they won’t grant approval — even after review — let them know you’ll move your assets to a broker who will. (And mean it.)
You’re not asking for a favor. You’re asking for access to a well-understood strategy that’s already supported by most major platforms. You’ve done the work. You’ve met the thresholds. You’re qualified.
And if your broker doesn’t agree?
You know where to go.
The Bottom Line
Collateral Compounding only works if your broker lets it. This isn’t a theoretical barrier — it’s a real one. If you can’t sell uncovered puts using Reg T margin, you can’t run the strategy.
Some brokers make that easy. Others block it completely. And the rest bury it behind layers of forms, checkboxes, and assumptions about what kind of investor you are.
But here’s the thing: you’re the one in control.
If your current platform won’t grant access — push back. If they still won’t budge — move on. You don’t need to settle for a platform that keeps your capital boxed in.
The strategy is sound. The mechanics are clear. The approvals are within reach.
So get yourself set up right.
Your portfolio’s already working. Let it work a little harder.