Option trading to avoid overnight fees over a short position

External question — Personal Finance Stack Exchange Author: David Original post: https://money.stackexchange.com/questions/157339 License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/ Adaptation: HTML converted to plain text; contact email addresses removed. I do a lot of short selling as a day trader. There is a pattern that I trade often. This one asks me to short and keep my position for several days. The problem I have is that the broker charges too much to keep my position overnight. On MEDS in the last days, I could pay up to 500 USD to keep my position overnight. How can I use options as a workaround? Can you give me an example?

External answer — Personal Finance Stack Exchange Author: Bob Baerker Original post: https://money.stackexchange.com/a/157358 License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/ Adaptation: HTML converted to plain text; contact email addresses removed. If the implied volatility is reasonable (not likely if the borrow rate for shorting is sky high), you could buy a high delta put (the put's strike price is much higher than the stock's price). To offset the aforementioned IV, you could utilize a vertical spread but then you'd have delta correlation issues. Alternatively, you could create a synthetic short position - sell an ATM call and use the proceeds to buy the same series ATM put. None of this helps you as far as I can see, MEDS doesn't offer options.