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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: saveslivesbyday who wrote (103089)	2/2/2008 5:50:20 PM
From: ChanceIs	Respond to of 306849

>>>I did exactly the same thing! And got the same response from the Schwab computer.<<< Hey. Great minds think alike. ;-) I found out that trick a while ago and it sure beats calling in. During trading hours, I just set a bid about $20 over the current trading price. No muss, no fuss. >>>buy deeper ITM puts as a "synthetic short". If you were willing to short at $12.00 why not just buy the 22.50 puts for 10.60 and give the MM a little tip on the spread?<<< Didn't mother ever tell you that its better to give than to receive?? As in GIVE someone else the option and don't RECEIVE it into your portfolio. In this climate, the main difference I see between shorting the calls and selling the puts is the volatility risk. Things have been wild, and that has pumped up the option premium. Can they stay this wild?? Perhaps for the next week or so. Regardless, if you buy an option and the current high volatility ebbs, you will lose that part of the premium. Relatedly, the spreads an also drop with volatility. That works to your advantage when you go to sell....the bid is closer to the intrinsic value. I take your point about buying deep ITM puts, and when I want to get synthetically short, that is what I do. Often it becomes a question of cash/margin allocation in your account.