It's a classic example of loss aversion[0]. In my mind the real loss risk of this venture is the opportunity cost spent developing the algorithm. Many people

It's a classic example of loss aversion[0]. In my mind the real loss risk of this venture is the opportunity cost spent developing the algorithm. Many people that fail to build trading algorithms would have been very successful if they invested their time/expertise doing something else. The person stands to lose not only his cash investment, but all of the cash he could have received if they focused their efforts on a less risky venture[1]. [0] https://en.wikipedia.org/wiki/Loss_aversion https://en.wikipedia.org/wiki/Loss_aversion [1] I'm all for risk, but Vegas has better odds.