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Short answer: yes. Long-winded answer: There's a difference between shorting stock and shorting options. When you sell stock short, it means you're selling shares you don't own. If you want to short Acme, you first call your broker and ask him to do a locate on some Acme for you. The broker finds however much Acme you want and borrows it for you. He then loans it to you, and you sell it. (Sometimes this timeframe is inverted--once you execute the short sale you have three business days to deliver the securities, so once Joe knows there is some stock for him to short he can execute the sale then deliver the stock after he's got it.)
But futures always have a short side and a long side. Being short on an option means you sold, or wrote, it; being long means you bought it. And it is very, very possible to write puts and calls now.
You may be thinking about naked options--those where the option is traded without owning the underlying asset. You can do those too. Basically, there are eight ways to trade stock options: buying and selling covered puts, naked puts, covered calls and naked calls. Of these, I don't believe there's a difference between a covered and naked put if you're short or a difference between a covered and naked call if you're long. On the other side there's a world of difference: if you're short on a naked call or long on a naked put and it's exercised you have to buy the security so you can deliver it, losing money in the transaction. But if you're short on a put, it doesn't really matter whether the counterparty owns the security--the option gets exercised, he delivers, end of story. And in reality, if you've got some extra scratch in your brokerage account and know some stocks that are about to get bad quick, buying naked puts isn't a bad way to make money. If you buy the put at a strike price of $20 and pay 50 cents a share premium, and the stock falls to $16 when you execute, you buy enough stock to cover for $16, turn it over, take your $20 and wind up with a $3.50/share profit. Not bad.
What else can I help you with?
What is the difference between investing in the stock market and futures and options trading?
Options and futures are derivatives of Stocks. This means that options and futures derive their value from the stock that they are based on. For a simplistic explanation, a call option with a strike price of $10 gains $5 in value when its underlying stock rises by $5 above $10. If the stock does nothing, then no value is gained. As such, buying options or futures isn't the same as buying the stock itself because by owning these derivative instruments, you do not own the stocks they are based on.
What is quadruple witching in relation to the stock market?
Quadruple witching is the date on which contracts for stock index futures, stock index options, stock options and single stock futures all expire on the same day. These days occur on the third Fridays of March, June, September and December and lead to increased volume and fluctuations in the markets.
What is triple witching stock options?
There are four "triple witching" days on the calendar: the third Fridays of March, June, September and December. On these days, the contracts for stock index futures, stock index options and stock options all expire.
What is the meaning of IV or OIV in relation to Futures and Options market?
oiv means in stock market
What type of stock is traded on the FTSE futures market?
The FTSE Futures Market trades a veritable cornucopia of stocks. The most popular items traded at FTSE include many different commodities and stock options.
Where is cocoa spot price traded?
As far as I know....The New York Stock Exchange Liffe Futures & Options
How can I short a stock using options?
To short a stock using options, you can buy a put option. This gives you the right to sell the stock at a specified price, allowing you to profit if the stock price decreases.
Where can one compare companies who offer stock futures?
The CNN website offer U.S stock futures data. On the site, they compare stock futures of many different companies. Bloomberg also allows one to compare stock futures.
What financial instruments are traded through the CME?
The Merc's diverse product line consists of futures and options on futures in agricultural commodities, foreign currencies, interest rates, and stock indexes.
What are stock exchange options?
There are a variety of options contracts on stock indexes, futures contracts, common stock, and commodities among many others. You can trade in and trade out of a stock anytime you want, though there may be some legal and regulatory restrictions on recent IPO stocks.
What are US stock futures used for?
Stock futures are contract agreements to purchase a specified amount of stock at a certain price at a set date in the future. Stock futures are used as a way to protect, or hedge, an investment.
What are the two types of options?
The two main types of option contracts are call options and put options, while some others include stock (or equity) options, foreign currency options, options on futures, caps, floors, collars, and swaptions.
