Roger's 1998 Short Picks Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Roger's 1998 Short Picks

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Oeconomicus who wrote (3949)	3/3/1998 8:50:00 PM
From: tom pope	Read Replies (3) of 18691

I still don't get it. <<demand among investors for long positions probably far exceeds supply, i.e. investors wanting short put positions.<< A short put position is a bullish (long) position. Short a put and buy a call and you have the 100% equivalent of a long stock position. >>In more active options, particularly index options, there is plenty of competitive arb activity and I would bet that you wouldn't find the same overpricing of puts<< The OEX options do indeed show persistent "overpricing" of puts. (By overpricing I mean that MIV increases as you go down the strike curve - i.e., "volatility skewing. ) Puts are theoretically overpriced because longs are buying them for hedging purposes. If they were truly confident about the upward direction of the market they's sell puts to pick up the income. Perhaps I'm missing a link in ur argument.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next