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It would be even more disappointing if the stock barely moved, and then crashed 2 days after the option expired. In that event, the put goes to zero and the tr
by bluquark 8y ago
It would be even more disappointing if the stock barely moved, and then crashed 2 days after the option expired. In that event, the put goes to zero and the traditional short wins the jackpot.
A more abstract way to make the same point is that a put or call is making a bet about volatility, whereas traditional long or shorting is a pure directional bet.
- slededit 8y agoThe traditional short has to close their position at some point is well. It’s never an unlimited duration.
- nodesocket 8y agoI know this pain. I bought some Jan 19' $10 put options in Kodak right after they announced their nonsense cryto abomination. I knew it had run on speculation and was going to come down. The problem was I timed it wrong. By Feb 7th after my options expired Kodk was trading in the mid $2 range, down from $11. I lost my entire option bet, oh well. Lession learned.
- bluquark 8y agoI think frequently about buying puts but never pulled the trigger. It's so, so tempting because in cases like that, you are 100% sure that you're right, and in fact you actually are right. The last time I thought of buying puts was a month ago when Tesla was at 350$, propped up by the "funding secured" claim. It was so obviously bogus and a sign of desperation. But I was terrified of buying an all-or-nothing lottery ticket, so I didn't. That one would've been a big winner and now I feel the pain of missing out. Hearing your similar Kodak story is useful to reinforce my resolve that I should just stay with vanilla investing strategies.