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Yes, but where the options are illiquid it is because the shorts are difficult
to achieve.
James Taylor wrote:
> I've never had an institution 'yank' a short from me. This should not be a
> consideration.
>
> Another extreme negative for option trading is: LOW VOLUME. Many issues
> have really lite volume, and slippage can be huge.
>
> ----- Original Message -----
> From: "Gitanshu Buch" <OnWingsofEagles@xxxxxxxxxxxxx>
> To: <realtraders@xxxxxxxxxxxxxxx>
> Sent: Tuesday, June 06, 2000 8:04 AM
> Subject: [RT] Re: Short Questions
>
> > >is there ever an
> > > advantage to out-right shorting a stock over the equivelent option play?
> >
> > sure -
> > a/ you get 100 deltas (ie $1 profit per point move in your favor) right
> > away if you're right.
> > b/ some firms will give you credit interest on your outright short
> > c/ you are free from worrying about time decay.
> >
> > your trade off in outright short:
> > a/ no upside protection, hence increase the risk
> > b/ usually increase your capital commitment esp for high sticker price
> > shorts
> > c/ cannot control when your short will be yanked by the institution
> loaning
> > it to you.
> >
> > > Do data showing short interest in a stock or index reflect short option
> > > positions?
> >
> > In stocks, no.
> >
> > > If short interest data do not reflect option positions, how should that
> > > information be viewed?
> >
> > Skeptically.
> >
> > Gitanshu
> >
> >
> >
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