Shorting as a Practice, page-7

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eztrang

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24/02/24

21:46

Post #: 72579700
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Originally posted by yaschmidt: ↑

I (and Northern Monkey, obviously) knew that posts like yours were coming. Your post is patently incorrect.

The put option is the opportunity to purchase shares of a stock at a set price, usually lower than the existing share price (though you CAN buy puts at a price higher than the existing price), on a set date. The truth is, most people only trade the options. Far more than 50% of put options expire, and become worthless.

The put option requires that someone who actually owns the stock underwrite the put option, putting the shares that they own at risk of being sold at a certain price, and collecting a fee for taking that risk. I just, this morning (in the States) purchased two put options on NVDA, with a strike price of $760 and an expiration of 3/8/24. Someone (maybe two someones), somewhere, underwrote those put options with their own shares. Those people were paid just over ten dollars per share to put their shares at risk of being sold. Nobody "shorted" anything.

If you don't understand how the sausage gets made, you probably shouldn't comment on the sausage.

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"The put option is the opportunity to purchase shares of a stock at a set price"

Wrong. Try again.

LTR Price at posting: $1.08 Sentiment: Hold Disclosure: Held
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