Printing dollars writing covered calls only to buy them back cheaper.

Discussion in 'Options' started by KINGOFSHORTS, Sep 18, 2008.

  1. I agree but you got here "naked short selling" that is a kind of SSF LOL :p
     
    #11     Sep 19, 2008
  2. Do any of you hardcore option guys know if there's any advantage to selling-short "synthetically" via the options? :confused:
     
    #12     Sep 19, 2008
  3. One disadvantage is the amount of time it may take to get filled in the options market. If you're arbing the stock in any way, you may have some slippage. This has been a problem with single stock futures (SSF) as well due to the lack of liquidity. Also, keep in mind, if you're doing something in the options market, you're counterparty could very well be hedging himself in the underlying as well so there's a natural execution race / problem.
     
    #13     Sep 19, 2008
  4. Selling short 'synthetically' also limits your risk (if it's a naked short) and keeps your resources free as you won't need to deposit more margin and pay the huge interest rate brokers charge for short positions.
     
    #14     Sep 19, 2008
  5. ..also limits your risk..".

    Why and how?
     
    #15     Sep 20, 2008
  6. If it's 'synthetically,' then it's the equivalent position with (by definition) the same risk.

    Mark
     
    #16     Sep 20, 2008
  7. There are still plenty of stocks left to short.
     
    #17     Sep 20, 2008
  8. GE on this stupid shortban killed premiums and call volume.
     
    #18     Sep 22, 2008