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Strategies & Market Trends : Zeev's Turnips - No Politics -- Ignore unavailable to you. Want to Upgrade?

To: Ted Downs who wrote (29124)2/10/2002 10:34:39 PM
From: Nancy  Read Replies (1) | Respond to of 99280
 
no, the seller of puts have to short stock to hedge because they have the obligation to buy stock or to pay money to the put holders. MM's main goal is to earn the spread and they almost do some delta hedge to protect themselve to certain degree.



To: Ted Downs who wrote (29124)2/10/2002 10:58:43 PM
From: mishedlo  Respond to of 99280
 
I believe the sellers would have to buy stock not short it. Agree?

Yes and no.
My call was for a rally so yes.
If there is institutional; unloading for whatever reason. The sellers of the puts (the option pits or other institutions, "da big boys" will short huge as protection against the puts they sold)

M


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