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Plus the spread. If you don't have a high-probability trade and you're not
planning on riding the option to expiration, you can kiss a certain fraction
of your capital away as soon as you place the trade.
Kent
-----Original Message-----
From: James Taylor <jptaylor@xxxxxxxxxxxxxxx>
To: realtraders@xxxxxxxxxxxxxxx <realtraders@xxxxxxxxxxxxxxx>
Date: Tuesday, June 06, 2000 11:40 AM
Subject: [RT] Re: Short Questions
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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