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Strategies & Market Trends : From the Trading Desk

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To: steve goldman who wrote (3983)12/17/1998 4:29:00 PM
From: bazooka  Read Replies (1) of 4969
 
anyone,

if i exercise a put option (lets say 10 contracts) without owning the underlying stock; will i be literally short 1000 shares of the stock (and will it appear on my balances)? if so, doesn't this allow me to circumvent the downtick rule. what, if any, are the limiations to this method. furthermore if i wanted to stay short a certain stock wouldn't this allow me to effectively keep my short position without having to waste a commision come expiration time. thanks in advance.

bazooka :-)
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