Put options and bankruptcy?

Thanks M. Just curious. I'm usually a buyer of volatility for speculation. Haven't sold much in the past and never to the bottom.

PS - You must have a smile on your face hearing about us battle it out with mother nature in the NE.

 

As long as you have enough margin to meet margin requirements you would just ride out the short calls until expiration.

 

Just sand blowing in the Bahamas ...

 

What about those melting polar ice-caps and the beachfront properties all around the world?

 

We will move if the water gets too high ...

 

its not necessarily best to cover.if you don't cover its not a gain for tax purposes.if the company goes bk and you never cover its a tax free gain if you are not a mark to market trader.

 

Huh???

 

simple.if you don't cover the short there is no taxable transaction.its the exact opposite of holding a long and never selling.

 

I got it; you are right ...

 

Sure... I'll worry about that at the same time I start to worry about the the efficient market hypothesis ever becoming reality.