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Technology Stocks : 3Com Corporation (COMS) -- Ignore unavailable to you. Want to Upgrade?

To: Stewart Elliot who wrote (12811)12/31/1997 10:16:00 AM
From: craig crawford  Respond to of 45548
 
<< What criteria to you use for deciding to buy puts instead of shorting? >>

I'm far from an expert on options, perhaps it would be better to speak with someone like Glenn R.

Put options can come in handy if the stock is illiquid and you don't want to get blindsided. You don't need upticks for puts. Puts will limit your losses if a company like COMS gets bought out. Puts tie up less capital than shorting. Your short can be called in forcing you to cover at any moment but you don't have to worry about that with puts.

Of course there are some downsides to options as well.



To: Stewart Elliot who wrote (12811)12/31/1997 5:16:00 PM
From: craig crawford  Read Replies (2) | Respond to of 45548
 
I also forgot to mention Stewart that buying put options come in handy when you want to go short a company that pays a hefty dividend. You have to pay those dividends to the owner of the shares you borrowed while your short but don't have that problem with options.


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