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

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To: Patrick Slevin who wrote (9432)	2/5/2006 3:35:46 PM
From: Kirk ©	Read Replies (1) of 12411

I thought of another way to look at it. If you want to cross a bridge with a $5 toll and you only have $3, then you are "short $2." That means if you cross, then you will OWE $2 at a future date. In old times, they'd take your spare tire and give it back when you paid off your debt. If I sell 50 calls and they expire worthless, then I never have to pay something in the future. If I am SHORT 500 shares of something, I eventually have to buy that something to give it back to whomever i borrowed it from.... since I would be "short" the uncovered number of shares. Probably nits I'm picking... but it helps to know for sure. Also, just because some people talk "Eubonics" doesn't make it proper English. Same applies in this case I believe. To me, I was confused when people said they were short this or that option because I thought the whole idea was to sell options and have them expire worthless, put you into shares at a price you like or take your shares at a gain you are happy to book. In only one of the three was the option holder actually required to purchase something to "cover a short position."

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