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Biotech / Medical : Biotech Short Candidates
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To: Robohogs who wrote (828)4/25/2007 7:29:05 AM
From: kenhott  Read Replies (2) of 897
 
I will remind everyone that any of the bear option strategies that requires you to sell calls face the issue of having the calls assigned early. Just something to think thru in case it happens.

An example is the bear call spread on NRMX. Sell the 10 calls and buy the 15 calls. If the 10s were assigned early, you are left with long 15 calls only. And because your brokerage won't let you hold a short in a stock like NRMX (no shares available to short), you will have to cover with purchased shares. Only if the stock has shares available to short can someone hold the short position instead of covering.

Also for NRMX, I would not put it past the management to take the decision past the Aug option month to seek a little revenge on the shorts because the next option month is Nov. Likely, no. Possible, yes.

edit: I have sold my call protection so I am just short the stock now.
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