Shorting vs Writing calls

  1. 1,741 Posts.
    Writing deep in the money calls is better than short selling because:

    Options:

    - when writing calls, time value is included which erodes
    - no stamp duty on options
    - no div to pay
    - may not need to close position at all
    - can effectively short a million shares without affecting price
    - low brokerage

    Short selling:

    - need to pay div to holder
    - need to pay interest
    - need to pay stamp duty in and out
    - brokerage is high
    - must exit trade eventually
    - dumping shares causes price to fall
 
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