Hard Luck with Mister Softee

Sometimes shorting the calls works, sometimes it doesn't.
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Mister Softee strikes back. A lot of times, stocks tend to go out at the strike price. The "smart money," meaning the people who play pin the tail on the strike, figured

Microsoft

(MSFT) - Get Report

was going out at $145. So there were many people shorting those January 145 calls for a buck earlier this morning. Heck, with the stock at $143, you might have thought you could coin money. If the stock went out at $145, the calls would be worthless and you could book a nice profit.

But Microsoft is a huge company and a huge part of the OEX, which expired at the close after a huge ramp. When the market went ballistic, tons of money came in and took 'Soft well beyond that strike. The people who were shorting that call with impunity had to come in and cover in order not to get creamed. Nothing worse than shorting something for a dollar -- that's the most you can make -- and having to cover for five!

On expiration days, keep an eye out for this phenomenon. Sometimes it works. You could have shorted a ton of

Intel

(INTC) - Get Report

calls today for a buck and made out like a bandit. I used to do this game constantly before I figured out that it was not worth the risk of one Mister Softee explosion. What it does say, by the way, is that there was strong real interest in 'Soft beyond calls.

But just in case you thought that it should have gone even higher: There was massive open interest in the 150 calls -- 14,600 calls, double the number of the 145s, and there was no way MSFT could chew through that one.

James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At the time of publication, the fund was long Microsoft and Intel, although positions can change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Cramer's writings provide insights into the dynamics of money management and are not a solicitation for transactions. While he cannot provide investment advice or recommendations, he invites you to comment on his column by sending a letter to TheStreet.com at letters@thestreet.com.