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Generally speaking, the stock price today is the best indicator of the stock price tomorrow. Investors know that uber is not profitable and it's expected to be
by netcan 7y ago
Generally speaking, the stock price today is the best indicator of the stock price tomorrow.
Investors know that uber is not profitable and it's expected to be that way in 6 months too. The stock could do good or bad over those 6 months. Shares/options are risky.
- deleted 7y ago[deleted]
- toomuchtodo 7y agoShares are risky. Options (in general) are not, as only the premiums you pay are at risk (versus unlimited risk with shorting shares).
- netcan 7y agoThat's like saying lead balls are lighter than rubber ones because they're smaller. The value at risk is the size of the investment.
- plouffy 7y agoNot unlimited. Your losses shorting a stock are capped at the price you borrowed it for (though technically it could be unlimited if you have to continue paying borrowing costs if you can't buy a share and close out your short [1]). [1] https://www.bloomberg.com/opinion/articles/2018-04-11/-go-to-zero-isn-t-great-for-short-sellers https://www.bloomberg.com/opinion/articles/2018-04-11/-go-to...
- toomuchtodo 7y agoThere is no limit to how high the price of an equity to go, which is where your unlimited liability comes from.
- SEJeff 7y agoI do wonder why you're being downvoted. Regarding a naked short, you're entirely correct in this ^
- peterbraden 7y agoWrong, you owe the stock, not the purchase price.