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Great point, all the "big boy" traders who have been raking in profits on put options, VIX volatility, and leveraged inverse etf's eventually will switch their

Great point, all the "big boy" traders who have been raking in profits on put options, VIX volatility, and leveraged inverse etf's eventually will switch their trades to bull. However, keep in mind, a market down 30% requires a 43% gain to break back even.

throw03172019 7y ago
Sorry for a maybe dumb question but what is the logic for 43% gain needed?
- jedberg 7y ago
  100 - 30 = 70 70 * .43 = 30.1 70 + 30.1 = 100.1
- acchow 7y ago
  30% loss from 100 is 70. 30% of 70 is 21. So a 30% gain at 70 gets you to 91. 1/.7 = 1.429
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- avalys 7y ago
  If the market drops by 50%, e.g. from 20,000 to 10,000, it will need to increase by 100% from that point in order to recover (from 10,000 back to 20,000).
- ComputerGuru 7y ago
  Because gains or drops are a percentage of where they were at just before, not from a fixed value.
- nodesocket 7y ago
  See this article on investopedia[1]. [1] https://www.investopedia.com/investing/selling-a-losing-stock/ https://www.investopedia.com/investing/selling-a-losing-stoc...
- bkberry352 7y ago
  100 -> 80 is a 20% decrease ((80-100)/100). 80 -> 100 is a 25% increase ((100-80)/80).
- czep 7y ago
  Math: 30% drop means going from 100 to 70. Now to get back up to 100, you need a 43% gain (30/70).
- greenshackle2 7y ago
  1 * (1 - 0.3) = 0.7 0.7 * (1 + 0.43) ~= 1 It might be more intuitive with round numbers. If you lose 50%, you need to double (+100%) to get back to your original value.
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rjbwork 7y ago
Don't have to be a big boy trader to do that. I'm up nearly 200% since last Monday just trading on Robinhood. yeah I didn't get my max returns due to their system being fucked a couple of time but I'm steady making money.
- nodesocket 7y ago
  Good for you, but don't really appreciate the gloating as I losing my savings and retirement hand over fist.

throw03172019 7y ago

Sorry for a maybe dumb question but what is the logic for 43% gain needed?

jedberg 7y ago
100 - 30 = 70 70 * .43 = 30.1 70 + 30.1 = 100.1
acchow 7y ago
30% loss from 100 is 70. 30% of 70 is 21. So a 30% gain at 70 gets you to 91. 1/.7 = 1.429
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avalys 7y ago
If the market drops by 50%, e.g. from 20,000 to 10,000, it will need to increase by 100% from that point in order to recover (from 10,000 back to 20,000).
ComputerGuru 7y ago
Because gains or drops are a percentage of where they were at just before, not from a fixed value.
nodesocket 7y ago
See this article on investopedia[1]. [1] https://www.investopedia.com/investing/selling-a-losing-stock/ https://www.investopedia.com/investing/selling-a-losing-stoc...
bkberry352 7y ago
100 -> 80 is a 20% decrease ((80-100)/100). 80 -> 100 is a 25% increase ((100-80)/80).
czep 7y ago
Math: 30% drop means going from 100 to 70. Now to get back up to 100, you need a 43% gain (30/70).
greenshackle2 7y ago
1 * (1 - 0.3) = 0.7 0.7 * (1 + 0.43) ~= 1 It might be more intuitive with round numbers. If you lose 50%, you need to double (+100%) to get back to your original value.
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rjbwork 7y ago

Don't have to be a big boy trader to do that. I'm up nearly 200% since last Monday just trading on Robinhood. yeah I didn't get my max returns due to their system being fucked a couple of time but I'm steady making money.

nodesocket 7y ago
Good for you, but don't really appreciate the gloating as I losing my savings and retirement hand over fist.