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Strategies & Market Trends : Bonds, Currencies, Commodities and Index Futures

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To: Patrick Slevin who wrote (9401)	2/5/2006 3:07:28 AM
From: Kirk ©	Read Replies (2) of 12411

Yes, but going short means you have to borrow the security until you cover. Selling a call option means you are selling time premium and you might never have to deliver, even if the price of the security goes up as long as it stays below the strike price. investorwords.com I believe using the term "shorting options" is not really correct since you don't borrow anything. You only need to have enough margin power to buy the security to cover the call should the price go up. Now if you sell a naked call, the effect COULD be the same in that you have to buy at a higher price, but you do not first need to find shares to borrow. To me, this is a difference.

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