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If you're long LinkedIn at $100, the most you can lose is $100. But if you short at $100, your loss can be infinite. This is what put options are for.
by DarkShikari 15y ago
If you're long LinkedIn at $100, the most you can lose is $100. But if you short at $100, your loss can be infinite.
This is what put options are for.
- stevenj 15y agoThat's true. But IMO, to make it worthwhile, you still have to get the timing right. That's the hard part. Identifying a bubble is relatively easy. What you don't know is how big it'll get and when it'll pop.
- Gaussian 15y agoDefinitely a ripe spot for put options... but there are no public put/call options available for LNKD yet, as far as I know. It's impossible to price an option without having some history of the underlying security's volatility--and we have zero history for LNKD. The spread would have to be gigantic to lure market makers into such a trade--and, rightly so, investors aren't interested in gigantic spreads. If you want to get bearish on this you'll have to strap on your helmet and just short it.
- ecq 15y agoLEAPS, which are basically long-term options, allows you to speculate longer (1+ years).