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Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: Moominoid who wrote (29673)	10/1/1998 8:26:00 PM
From: Brad Bolen	Read Replies (1) \| Respond to of 94695

David, Actually you GET interest on the money from your short. B> RE: To: +Brad Bolen (29661 ) From: +David Stern Thursday, Oct 1 1998 5:02AM ET Reply # of 29792 One way to think of a put option is having a short position on margin with a stop loss order. On the short you have to pay interest on the borrowed money and use lose a more or less predetermined amount (ignore gapping Black-Scholes did and won the Nobel Prize <g>) if the stop loss triggers. On the option the time erosion is equivalent to interest on your much larger leverage.