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Playing & Trading Strategy

It's generally a good idea to never short calls or puts, unless you are certain of the outcome (which is VERY rare). -more-

Posted by: arf on Jun 17, 10:06 in response to Ghinsberg's post Shorting option

You stand to lose far more than if you simply ignored the .PU or .CA for that stock rather than shorting it.  Shorting is the only way to lose as much money as the movie makes, if it takes off, so use it wisely. 

 

The payoff on the .PU and .CA aren't really worth shorting, as they only go to zero and not negative numbers (which shorting will put you into).  So you can usually only make 40k on something like AVENGR if you got in early $2.00).  Not worth the risks if it does flop.  You only need to get hit for a couple million once and shorting derivatives becomes a touchy subject.





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