If I understand you correctly, the issue is one of margin.
For example, if I am holding 100 in-the-money calls, will my broker allow me then to short 10,000 shares without any additional margin requirements? The answer is no. The margin reuirements for shorting 10,000 shares is the same with or without my 100 in-the-money calls with my broker.
Based upon my options experience, my advice would be keep it simple.
By that I mean, define the trend first...flat, up or down...then implement a complimentary options strategy.
My strategy is even simpler: I'll utilize options only when I have reason to believe the trend is either up or down. In flat markets, I'll buy or short shares, and on occasion, when Dell-type situation arises, buy some very short term calls if the risk/reward stacks up. (In the Dell case, the odds were about 4 to 1 as best I could determine, while those 32.50's at $0.05 offered about 50 to 1 on Dell news...a reasonable risk given that assessment)
I'll keep an eye on those July calls as we approach earnings date as a similar opportunity to the Dell news just might present itself if AMD's price drops below $30 support. |
