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The difference between "buy options" and "don't put this in your passive retirement fund" is the same difference as "I'm confident in the advice im dispensing"
by palebluedot 8y ago
The difference between "buy options" and "don't put this in your passive retirement fund" is the same difference as
"I'm confident in the advice im dispensing" and "I have no idea what I'm talking about".
No, it's not at all. Buying options is actively betting on both price and time targets, and carries a much different risk profile compared to simply avoiding a specific investment.
- whatshisface 8y agoBuying a stock is a "rise eventually" bet, I wonder if it is even possible to buy a "fall eventually" bet. Probably not because nobody would be willing to bet that a company will be around forever!
- hedora 8y agoHolding cash is a “fall eventually” bet. It has negative payoff after inflation, which is worse than other low to zero risk options (like savings accounts and govt bonds). In one view, and with long return horizons, an index-based etf is a “will be around forever bet”, in that it bets there will be economic growth on average for as long as the dollar is worth anything. The main way it can go wrong is with hyper inflation. Maybe going long, with 100% govt bonds is a decent fall eventually bet, but again, that’s targeting a very specific scenario where all of the economy crashes for a long time, but bonds still pay out (better than real estate or other physical goods).
- monochromatic 8y agoShort selling. But be careful with margin calls.
- whatshisface 8y agoShorting has a specific delivery date, which is different from holding stock because you can choose when to sell it.
- monochromatic 8y agoI don’t believe that’s right.