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don't options solve this? Buy a put at 50, watch it fall, then exercise. Doesn't work out, and you're only out the premium.
by jfoutz 10y ago
don't options solve this? Buy a put at 50, watch it fall, then exercise. Doesn't work out, and you're only out the premium.
- cglouch 10y agoOptions solve it in the sense that you limit your downside, but you can still very well lose your premium. Even if you're 100% convinced that $TSLA is overvalued, markets can remain irrational longer than you can remain solvent, and your puts may very well expire worthless.
- jfoutz 10y agoWell, yes. But that's a different thing than the infinite risk of a naked short.