I have limited experience trading options. I like to trade volatility, and usually fade volatility through VXX.
Question:
Sometimes I have difficulties locating VXX shares to short. If I bought ITM puts for VXX, and exercised the contracts immediately, am I guaranteed the shares? Or will I fall into the same issue with VXX ie not being able to locate shares to borrow/short.
Thanks.
Not that anyone will answer, but I figure out the question.. Not a good idea, I will lose money... I am better off paying for a borrow through my broker.
You'll more than likely have to buy them back in on settlement date following the exercise of your long puts. I'd also suggest you give your broker a call in regards to whether or not you'll end up being charged a fee and if so how much they are. If the stock is hard to borrow, these fees can be really expensive and you get charged for weekends and until the buy to close settles.
you will fall into same category, and likely get bought in day after exercise. If you are a frequent flyer and it's hard to borrow, your firm might think you are trying to play games...