I know this has been asked before but i would like to just make sure my understanding is correct. I buy 500 bullets on IBM do I then buy 500 shares of ibm stock and when stock starts to drop i sell the stock and i am synthetically short. to cover i buy back stock. now i understand I can do this over and over during the day with the same bullets. What happens with the long stock I bought to cover at the end of day? Is it taken by firm to cover put or do i have to sell it? I hope someone can help,
you don't buy long stock.......... bullet firm gives you long stock from their inventory which is married to bullet when the put expires at the end of the day the long stock is automatically sold for you. Robert Tharp