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It's a very meaningful distinction. If you have a put option, the stock can go to the moon and back multiple times, and you can still end up in the money on the
by incrudible 5y ago
It's a very meaningful distinction. If you have a put option, the stock can go to the moon and back multiple times, and you can still end up in the money on the strike date. If you have a short position, you're going to get margin called on the way to the moon and it's "game over".
- arcticbull 5y agoTrue, but if it doesn't go anywhere you lose it all with a put, and lose far less with a short (just the borrow fee).
- Kranar 5y agoIn other words, a short and a put are not remotely the same things and are meaningfully distinct from one another.
- arcticbull 5y agoI certainly agree their risk-reward profiles are materially different. They're similar in that they are both bearish positions.