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Author: kschof Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 44593  
Subject: Shorting vs. LEAPS Date: 8/21/1997 6:51 PM
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ASSUMPTION: LEAPS trade on a volatile stock which one expects to decline. I understand there is a limited universe of stocks for which LEAPS are available and I understand that I pay for the time value of money (which erodes relatively slowly on LEAPS, as opposed to quickly short term options).

QUESTION: Why would one short the stock versus buying a long-term put? If the stock has a fairly wide daily variance it seems that I get more leverage and limited risk for what often seems to be a very reasonable option premium? Any comments from the experienced shorts on the board would be appreciated.

kschof
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