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Playing & Trading Strategy

My mind got into a math orobouros: shorting a call

Posted by: Wilderness_Journey on Aug 04, 07:53

For some people this is probably an easy math question, but I cannot figure out how to...figure on this one. If you short max on a movie call, what happens at payout? For instance, a movie had high expectations and was listed HYPOTHETICALLY at a $30 call. So the stock opens at $2/share. You don't believe the movie will make it to that hallowed $30 million opening weeking take. You short max the 20,000 shares and many agree with your stance and also short the derivative. Let's say that by the end of the weekend the box office take is $20 million (for math's sake). Do you only receive credit during the shorting timeframe and then cashout at $0? Or do you make the inverse ($10/share) back because you shorted it? (Actual Box Office - Strike Price) 

It's probably an easy answer, but I've overthought it and now am totally confused.

My mind got into a math orobouros: shorting a call Wilderness_Journey Aug 04, 07:53

answer... RazorHawk Aug 04, 10:09

Keeper {nm} Grunt Nov 09, 13:21

Spulling mistake {nm} Grunt Nov 09, 13:23





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