Amazon.com, Inc. (AMZN) 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.

Technology Stocks : Amazon.com, Inc. (AMZN)

AMZN 220.90

-0.7%

2:25 PM EST

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Walter High who wrote (3208)	4/21/1998 2:33:00 PM
From: zebraspot	Read Replies (2) of 164684

Two points on hedging and shorting: Why would anybody short AMZN when puts are available? Pay the premium and avoid the "infinite" downside and mark-to-market problems inherent in shorting. Buy the OCT's to avoid the timing problem. I like the OCT 80's(at current price around $10). $10,000 will become $50,000 if AMZN gets to $30. Your risk is limited to losing the $10,000. I think there is a pretty good likelihood that even if AMZN doesn't fall to $30, say, it will fall to at least $70. At $70 you are breakeven. Don't forget that if you're long the stock and buy puts to hedge, you've probably committed a "constructive sale" under the new tax rules(thank Clinton for this). You probably owe taxes on your long position even though you didn't sell. Hedging with puts ain't what it used to be. there are limited ways out of this, but none that will let you remain hedged in the long. For instance, if you are now hedged with puts you need to sell that position between now and next 1/31; once you sell the puts you have to sit unhedged in the long for at least 60 days.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next