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Shorting has got to be the dumbest way to invest. With a normal investment there is a ceiling to how much you can lose (the amount you invested) but there is no
by ovulator 9y ago
Shorting has got to be the dumbest way to invest. With a normal investment there is a ceiling to how much you can lose (the amount you invested) but there is no ceiling to how much you can gain.
The complete opposite is true for shorting, not a bet I would make on any certainty level.
- alistproducer2 9y agoThis is my exact thought as well. The risk-reward of shorting makes the most sense when volatility is low. It is certainly the worst thing to do in an irrational bull market AKA bubble.
- arcticfox 9y agoYou can just artificially limit your losses by bailing out when you lose as much as you shorted. You run a small / theoretical risk of getting stuck in a short squeeze situation where you can't get out, but that risk varies substantially by security and there are often laws or mechanisms you can use to protect yourself.
- honestlyreally 9y agoCrypto currency is the wild west,there's no one coming to save you, exchanges and whales have access to the books on who they can squeeze. Its how many operate.
- magnetic 9y agoMaybe it's a calculated risk thinking that if you lose the bet you file for bankruptcy?