Option Investor
Newsletter

Explanation of the Short sell of SLT & SVNT

HAVING TROUBLE PRINTING?
Printer friendly version
Explanation of the Short sell of SLT & SVNT

The short sale of SLT and SVNT was a defensive measure when short put positions become threaten early in the recommendation cycle. What it does it reverses the market sentiment so that the position has an opportunity to get back to breakeven or minimize the loss of a position if this issue continues its downward direction. We could have held the positions and potentially faced a hard hit, but by short selling the stock, we have in essence created a covered put position, which could be profitable if the market condition continues its downside momentum. The lower the issues go the better our chance to convert hese positions into breakeven or even profitable positions. However, we also face the possibility of the short position going against us and in the SLT short we could incur additional losses, but that requires a change in the general mode of the market from bearish to bullish.
The SVNT position has agreaterchance of profitabilty because the position was out of the money and the short sell of the SVNT stock is trading closer to the price shorted. Subcribers received various short fills today,but most had to be greater than $19 and some closer to $19.50 on SLT and $19.40- $19.80 for SVNT.

I have provided two spread sheets with some what if analysis to better explain the results we need achieve to profit or breakeven from these positions:

See below: SLT and SVNT

1.) SLT short sale and put write 22.5 Feb put write
2.) SVNT short sale and put write 17.5 Feb put write



SVNT below:

Option Writers Newsletter Archives