I have two closely related questions about what happens when I write a naked option.
My understanding of short-selling a stock is that as long as the short position is open, my brokerage will (or might, at least) charge interest on that position. (This answer implies that interest is usually charged on the value of the borrowed stock, but this question seems to suggest that interest on short stock positions is uncommon.)
How about writing options? If I have a naked short position in an option, will my brokerage charge any interest on that position?
Likewise, my understanding of stocks is that when you sell short, you're not allowed to invest the proceeds from the sale; you have to hold them in your account as cash. If the value of the stock drops below the price you sold it at, then cash is "released" from the position. (I'm not sure if the opposite happens—cash being absorbed when the price goes up—but that's not what I'm asking about right now.)
Does the same go for writing options? If I write a naked option, do I have to hold the proceeds as cash just like with a short sale, or am I free to invest the proceeds?
(I'm guessing that the interest charges and the restrictions on uncovered options must be similar to the charges and restrictions for short positions in stocks. Otherwise, there would be little reason to ever sell a stock short; people could write deeply in-the-money call options instead.)