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You won't be able to short sell Facebook when it first goes public, but some time later you'll be able to when the stock is easier to borrow. Facebook options

by rudiger 14y ago

You won't be able to short sell Facebook when it first goes public, but some time later you'll be able to when the stock is easier to borrow. Facebook options (specifically, put options) will be listed at the end of the month, but those are likely to be overpriced due to underlying volatility. You might want to write call options instead of buying put options, but that's also a risky strategy.

wtvanhest 14y ago
You might want to write call options instead of buying put options, but that's also a risky strategy. I don't know the original poster, but I would guess by the way he/she is asking that question that they probably do not understand markets well enough to take on the risk of writing a call option.
- oskarth 14y ago
  You are right that I don't fully understand the implications, all I know is that such products are extremely dangerous unless you compose them carefully (iron butterfly, straddle, collar! - whatever that implies). Truth to be told it's not something I'm actively considering. I just thought that there ought to be a bear fund/product which is positioned against companies like Facebook and Groupon - the question is how easy it's to be a part of it if you don't have 10M+ cash and have regular contact with GS or what have you.
  - wtvanhest 14y ago
    My comment wasn't directed at you in the sense that you should know, rather I was pointing out that writing call options is not for someone looking for a way to short Facebook who is not a sophisticated investor since writing a call option has a theoretical unlimited risk. Any regular stock broker could help you set up an account and advise you on how to “bet against” companies being actively traded as long as you are allowed to in your specific country. GS and other investment banks are required for much more complext trades than betting against companies. Usually trades involving illiquid markets.

by rudiger 14y ago

wtvanhest 14y ago

You might want to write call options instead of buying put options, but that's also a risky strategy. I don't know the original poster, but I would guess by the way he/she is asking that question that they probably do not understand markets well enough to take on the risk of writing a call option.

oskarth 14y ago
You are right that I don't fully understand the implications, all I know is that such products are extremely dangerous unless you compose them carefully (iron butterfly, straddle, collar! - whatever that implies). Truth to be told it's not something I'm actively considering. I just thought that there ought to be a bear fund/product which is positioned against companies like Facebook and Groupon - the question is how easy it's to be a part of it if you don't have 10M+ cash and have regular contact with GS or what have you.
- wtvanhest 14y ago
  My comment wasn't directed at you in the sense that you should know, rather I was pointing out that writing call options is not for someone looking for a way to short Facebook who is not a sophisticated investor since writing a call option has a theoretical unlimited risk. Any regular stock broker could help you set up an account and advise you on how to “bet against” companies being actively traded as long as you are allowed to in your specific country. GS and other investment banks are required for much more complext trades than betting against companies. Usually trades involving illiquid markets.