Timeline for Why do speculators short-sell a stock when they wish to go short, rather than purchase put options?
Current License: CC BY-SA 4.0
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| Jun 27, 2018 at 22:57 | comment | added | Bob Baerker | You are conflating different issues. (1) As IV changes, theta may change but an option's price still decays all day, every day until expiration, regardless of your expectation. (2) How you utilize options (holding until expiration) has nothing to do with their daily price behavior. IV still expands and contracts daily. (3) In the context of the OP's question about short stock versus long put to capture a downward move in the underlying, long puts are most likely not going to be held until expiration. | |
| Jun 27, 2018 at 21:37 | comment | added | Acccumulation | "They are a wasting asset so time decay (theta) erodes your position. " Not in expectation. "They can inflate in value if implied volatility expands and can lose value if it contracts " That's only relevant if you're closing your position out early. | |
| Jun 27, 2018 at 16:25 | history | answered | Bob Baerker | CC BY-SA 4.0 |