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Technology Stocks : IFMX - Investment Discussion -- Ignore unavailable to you. Want to Upgrade?

To: Gary Leger who wrote (10771)	5/12/1998 6:10:00 AM
From: Robert Graham	Respond to of 14631

I think the person who wrote the option has one to three days for the stock to be delivered to the person who exersized the option. This delivery of stock does not happen instantly. If for instance it was a naked CALL, then the CALL writer would need to go out and purchase the stock in the open market. As far as your ability to exersize and sell immediately, this is possible if the selling is technically considered shorting the stock. Perhaps it is referred to as "outright" selling of the stock since your actions are coupled with the eventual delivery of the stock which may be taken care of "behind the scenes". But I am pretty sure that the option writer has at least one to perhaps three days to deliver. Either way, the end result is the same. Anyway, this "blowing out"of a position is specifically referred to as shorting the stock, and for the exact reasons that I gave. This I am positive of. I have obtained this information from an article that a hedge fund manager authored. I can understand given your experience why this procedure seems incongruent to what you have come to understand. If you want, I can dig up this article and post it here. Then you can relate your impressions to me for comparison. Bob Graham