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Wednesday, June 4, 2008

Buy vs Short Stocks and Options

Just because the stock is down does not mean the put is down as well.

Here is proof as I have been obsessed with MA lately. I took profit from the day before and had thought that may be I left money on the table again seeing a 10pts drop in the morning. And yes, I did check the greek, but nothing explains it.

On another note, if you shorted GRMN at 50 and covered at 40, then you have a 20% gain. But if you bought at 40 and sold at 50, they you have a 25% gain. I am using 50 because that was the price where most pundits were suggesting to short the stock.

Hindsight is 20/20 (f8 copyrighted - lol)