Concordia Healthcare Corp. T.CXR.R

How can it be done

[Roller007]

I'm not strong with options as I only buy with cash.  My question to those who know is if I was short Cxr how can I play options to make money if the price jumps suddenly by $25 while still maintaining g my short position.

[Marcel7]

Hi Roller, They can hedge their position with options just as longs can. They purchase call options at various strike prices so that if the SP rises above that their losses are capped. So technically, they can still hold million of shares Short and be fully covered by options, in order for this to be the case though we would need to see more open interest, as the current total number of call

[CNInvesting]

Marcel is spot on. I'd like to add that the bigger part of the options market on CXR is on the Nasdaq. In June alone, there's open interest for the OTM strike range of $35-$45 for a total of 1,720,000 options (shares).  July is nothing to be alarmed with but August on the other hand has also lots of open interest. I see OTM strike range of 35$-55$ for a total of 1,379,700 options

[Marcel7]

Quite true. I didn't mention the puts as the question was asking specifically how they could make money on a big price spike while maintaining their short position. But yes, you are quite right, they could supplement that by selling some of their potential profits on a drop by selling puts as well. If they want to close out their position selling a put and buying a call is essentially