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Strategies & Market Trends : The Residential Real Estate Crash Index
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To: Think4Yourself who wrote (80373)6/28/2007 12:34:36 PM
From: Dale BakerRead Replies (1) of 306849
 
If I am exercising puts you wrote then I want to be short the actual stock. If you wrote them naked, wouldn't you need to short the stock to meet the assignment, and then the short position would be assigned to me?

An expert can correct me but I think this is right:

If you exercise puts the broker can make you buy the shares in the open market, then sell them to the put writer. No guarantee you can just borrow them.

If you wrote the puts naked and they are exercised, you have to buy the shares put to you. Being short allows you to cover with the shares put to you, but is not a prerequisite of put writing at all.

So no short position would be assigned from the put writer to you. Who is short is up to them and their broker and what they can borrow.
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