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Author: EvanW Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 125003  
Subject: Re: Shorting against the box Date: 8/7/1998 11:36 AM
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KATinChicagoland writes:
Hey Evan, you're pretty good, wanna write for my web site?

You've mastered the basics on the short sale. If you buy an at the money put you don't recognize your gain because you've kept the upside. If you also sell a call, you've given up both the up and the down and probably will be considered to have sold your appreciated stock position unless there's a large enough gap between the strike prices of the two options (a wide enough "collar"). And if the put is significantly in the money, the put all by itself may count as a short sale. For more than that you'll have to wait until I write this section of my web site.

Kaye Thomas


Thanks for the compliment...unfortunately, I don't think there are enough hours in the day for me to work my day job, keep up with my investments, read the Fool, and do some writing.

In regards to purchasing puts, basically you're saying that it's relatively subjective based upon the strike prices of the options in relation to the price of the underlying security at the time of purchase. Whew, that's a mouthful. What about out-of-the money protective puts? Is that shorting against the box?

Looking forward to you writing this section of your web site (which, by the way, I really enjoyed).

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