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It's absolutely a basic feature. It's the opposite of buying a share, and your profit/loss is easy to calculate. With options, you need to worry about premium,
by steven2012 7y ago
It's absolutely a basic feature. It's the opposite of buying a share, and your profit/loss is easy to calculate. With options, you need to worry about premium, time decay, spreads and lower liquidity, etc.
- smileysteve 7y agoShorting is very arguably more complicated than put options; Key factors are dividends, float, and short interest. From a brokerage house perspective, it's a whole other marketplace to set up (brokers willing to back your interest)
- webninja 7y agoFair points but at least you don’t have to worry about changes in implied volatility (Vega) when shorting. You can buy a put option right before an earnings report and watch it’s implied volatility drop like a rock after the earnings report is released. This can remove any profit you would’ve made pretty straightforwardly with a short. Not to mention you also have to pay Theta (time-decay value) all while holding the put option.