Chart, page-1926

Ok I may need to be corrected by someone that does this call and put writing a bit more but could this theory stack up:


I like PAR
I believe it will go up eventually, I feel it has good to great longer term prospects...
I thus, own stock...a good amount of it for instance.... (hypothetically speaking *wink*)

NOW, to protect the stock as I believe there is a greater chance of shorter term volatility and thus a propensity of the stock to fall for a bit...I would normally buy a put option to act as insurance to protect my long stock.

BUT, Put options are not readily available as we are a small and relatively illiquid equity...SO I short stock at the same time.


THIS allows me to take advantage of unlimited upside (think DEAL or a surprise announcement), BUT at the same time my downside is protected...if we keep falling my short position increases and Im suitably hedged. IF in the event we do get that gap up or better still a gradual lift over time, I can simply close (buy back) my short shares and I , like the rest of us at HC PAR (well, most of us) enjoy the ride up?


This could be a rationale for the shorters?

Feedback requested on this theory.




(note : For the record I am in no way the owner of any shorts or shorting position on PAR, above not advice in any way)