Rackwise, Inc. Message Board

  • smac6933 smac6933 Sep 7, 2007 11:10 AM Flag

    Both Farrtrade and Global shorted AMZN calls

    And they think this merely raises their short price???


    They shorted BIDU calls (i.e. sold calls naked) when it was $100. They received $5.

    BIDU reported that night and the stock jumped $40 to $140.

    They THINK they will be assigned at $105. They're wrong. They're on the hook for a nice $35 loss, or 700%!!!

    Farrtrade and global_warming, funny how you never show anyone how I'm wrong.

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    • why even response to those retards. just ignore them!

    • It is definitely NOT the same fukcing thing as shorting the stock at $55.

      AMZN goes to $70, by shorting the stock, you're down 40%.

      By shorting the calls naked, you're down 700%.

      How the fukc is this the same thing???

      Man, you really have your head up your ass.

    • i did not. i only tried to educate you, so you stop making a bigger ass out of yourself than you already had.

      let's try again: Shorting Call Options 101

      let's use your favorite example, AMZN and assume your for a moment someone is bearish on AMZN and stock is trading at $50. Now as a bear you have several choices:

      1) you can buy puts
      2) you can short the stock at $50
      3) you can short the calls, say $50 calls at $5

      if you short the $50 calls at get $5, and stock goes above $50 by expiry and you get exercised, you are effective SHORT the stock now, except you short price is $50+$5= $55

      so...i assume you're at least a little bit of a intelligent person. what do you prefer here, being short at $50 (in the case of having shorted the stock) or $55??? the answer is $55 idiot. so now be quiet
      shorting calls is a strategy which allows you to receive a higher price for your short position. get it now, STUPID??

      • 2 Replies to gobal_warning
      • You're wrong.

        Tell me this using your example:
        If AMZN reports after hours on the day you sold your calls naked, and the stock jumps to $70, what is your net the next day?

        Just answer that. Thanks.

        (PS. In your example, I agree 100% with you: IF AMZN stays at $50, you're ahead $5. My entire beef with you and Fart is you're ignoring my factual statement that your risk is enormous, and actually happened to Fart on both AMZN and BIDU. But I digress, please answer the above: what happens if AMZN jumps $20 in AH?)