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Terry Lennox
Terry Lennox
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I'm still trying to figure out, why, if a speculator believes a security will go down in value they use the traditiontraditional route of short-selling, when it would seem that purchasing put options is the less risky method.

The potential losses for a short seller of stock are almost unbounded whereas a buyer of put options is only liable to the amount he has purchased in put options.

Is the problem that options markets do not have the liquidity to handle any meaningful amounts?

I'm still trying to figure out, why, if a speculator believes a security will go down in value they use the tradition route of short-selling, when it would seem that purchasing put options is the less risky method.

The potential losses for a short seller of stock are almost unbounded whereas a buyer of put options is only liable to the amount he has purchased in put options.

Is the problem that options markets do not have the liquidity to handle any meaningful amounts?

I'm still trying to figure out, why, if a speculator believes a security will go down in value they use the traditional route of short-selling, when it would seem that purchasing put options is the less risky method.

The potential losses for a short seller of stock are almost unbounded whereas a buyer of put options is only liable to the amount he has purchased in put options.

Is the problem that options markets do not have the liquidity to handle any meaningful amounts?

Tweeted twitter.com/StackFinance/status/1012024404832931840
Source Link
Terry Lennox
Terry Lennox
  • 253
  • 2
  • 7

Why do speculators short-sell a stock when they wish to go short, rather than purchase put options?

I'm still trying to figure out, why, if a speculator believes a security will go down in value they use the tradition route of short-selling, when it would seem that purchasing put options is the less risky method.

The potential losses for a short seller of stock are almost unbounded whereas a buyer of put options is only liable to the amount he has purchased in put options.

Is the problem that options markets do not have the liquidity to handle any meaningful amounts?