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You could almost certainly have done better by borrowing money and buying the right kind of options. If you're willing to give up half the upside for a stop-los
by ikeboy 7y ago
You could almost certainly have done better by borrowing money and buying the right kind of options. If you're willing to give up half the upside for a stop-loss, you would collect quite a premium and should more than offset even usurious interest rates.
- ikeboy 7y agoYou want exposure to 50% of the upside: this means you want exposure to 50k worth of each stock. You don't want to lose more than 100k total, and are ok being wiped out if both drop 50%. Seems to me like you'd want to buy 25k worth of call options at a 50% strike price. The options would cost 25k and would reflect shares worth 50k. You get exposure to 50k of shares on the upside, but your loss is capped at 50k total, which is twice as good as your deal. All you need to do is pay interest.