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To: peter michaelson who wrote (4146)12/11/2000 9:01:33 PM
From: Pete Mason  Respond to of 19633
 
>> All in all, it's a lower risk, lower reward, higher transaction cost way to short a stock <<

Mmmmm, that does sound tempting! :-)

But seriously, is that any better than just buying the puts??

-- Pete



To: peter michaelson who wrote (4146)12/11/2000 9:09:39 PM
From: Tom Hua  Read Replies (1) | Respond to of 19633
 
Peter, if you sell deep in the money calls, (ex., strike price 40), risks and rewards are comparable to shorting the common (assuming you would be happy to cover at about the strike price). Same margin requirement, transaction cost may be slightly higher ($17 1/2 for 10 contracts at Dreyfus compared to $15 commission for 1000 shares), and you do get time premium.

Regards,

Tom


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