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Rackwise, Inc. Message Board

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  • gobal_warning gobal_warning Sep 7, 2007 11:43 AM Flag

    Both Farrtrade and Global shorted AMZN calls

    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??

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    • 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?)

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