Momenta Pharmaceuticals Inc. Message Board

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Biotech / Medical : Momenta Pharmaceuticals Inc.

MNTA 52.48

0.0%

Oct 2 5:00 PM EST

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To: IRWIN JAMES FRANKEL who wrote (2563)	10/26/2010 11:16:18 PM
From: Jeffry K. Smith	Read Replies (1) of 3027

>>What I don't get about MNTA is the short interest increase. "You might think of it as similar to covered writing." That's just it - the covered call situation has defined, limited risk. On the other hand, shorting a stock involves (to my knowledge) unlimited risk. If I short a stock and buy a call, I'm limiting my risk - fine. If I short a stock and sell a put above my short price, I'm increasing my basis, and covering myself to a point. There's no sense selling a put below where I've shorted the stock, so unless I've missed a possibility, I don't understand how you can relate the two strategies. I'd sure appreciate an example of why you feel the two are similar strategies (riskwise).

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