4 ms·
>unlimited downside Is the stock going to infinity before you can repurchase it really a concern?
by navigatesol 8y ago
>unlimited downside
Is the stock going to infinity before you can repurchase it really a concern?
- xiphias2 8y agoIf you look at it as a geometric Brownian motion (which is better model forstock prices than brownian motion), the probability of the price halving is the same as doubling. When you're shorting, you lose twice as much when the price doubles than when it halves. It's not infinity, but it's a huge difference, and volatility is your enemy.