9 ms·

>Taking credit card advances to YOLO into short-dated OTM call options is drug-addict level desperation. It's actually somewhat rational. Say you just graduat

by treis 6y ago

>Taking credit card advances to YOLO into short-dated OTM call options is drug-addict level desperation. It's actually somewhat rational. Say you just graduated college and make 30k as a waiter. You scrape together savings, loans, CCs, etc. and pull together 20k. Take that to Robinhood 2-3x it with margin and place a 50k bet that has a 8% chance to pay off 10x. If you "win" you're up 15 years of wages or more. If you lose, well, you declare bankruptcy and shit gets wiped. It's not like you were buying a house or a nice car on 30k a year anyways.

tpmx 6y ago
The sensible response from society is unfortunately restricting personal bankruptcy laws. Essentially this is an organized attack on civilized society and it needs to be shut down, somehow.
- baq 6y ago
  if this is the only alternative you can come up with, then you unfortunately suffer from a lack of imagination. another solution would be to make that $30k enough for a comfortable life so the bet doesn't seem that attractive in the first place.
  - tpmx 6y ago
    I think you may have replied to the wrong comment?
    - cbozeman 6y ago
      No, they didn't. If you're so daft that you think its okay to give literally trillions of aid to companies in the form of tax breaks, bailouts, subsidies, and other horseshit, but letting people write off mere millions in bankruptcy proceedings because they know at a fundamental level that the system is - if not broken, definitely malfunctioning - then brother, you are part of the problem here.
- treis 6y ago
  In a country where we just handed out $50 billion dollars to airlines (again) a bunch of poor WSB tards abusing bankruptcy is not really a problem. Especially considering how predatory the CC companies et. al. are. It's like a zebra killing a lion with a lucky kick and thinking "tut tut we need to change the rules of the hunt".
  - tpmx 6y ago
    Okay. Luxuary Space Age Communism it is. Everyone shall have all of the money. (I skipped a few obvious steps.)
- TheCoelacanth 6y ago
  The sensible response from society is to say "if credit card companies were foolish enough to give unsecured cash loans to these people, then that's their problem".
- leetcrew 6y ago
  or just double the amount of time that bankruptcy stays on your credit report and let the lenders handle it as they see fit. I will say I find your take rather dramatic. I don't see screwing over a couple hedge funds as an "organized attack of civilized society".
mywittyname 6y ago
I mean, it's still rational for professions too. If you make gamble and lose, then you just need to work a little longer to catch back up. But if you win, then you might never need to actually work again. Throwing $500-1000 a month into OTM options trading can generate life-changing amounts of money. That's like the lease payment on a 3 Series BMW. So it's pretty sustainable for working pros.
- moneywoes 6y ago
  But what is the expected value? You can lose way more than the principal no?
  - xscott 6y ago
    > You can lose way more than the principal no? Not if you're buying options (calls or puts to open). Maybe you're thinking about short selling, or selling naked options.
ac29 6y ago
A 92% chance of bankruptcy (to use your example) seems like a poor idea. Its not about the outcomes of winning vs losing, the smart move is to not play. A college graduate hopefully will not be making $30k/yr for too long, and being almost completely cut off from credit for a decade is really going to sting when they do want to finance a car or other large purchase.
- kyawzazaw 6y ago
  > A college graduate hopefully will not be making $30k/yr for too long I think you might be in a well paying profession
  - ac29 6y ago
    For what its worth, I made less than $30k/yr (with zero benefits) for a few years after graduating college about 10 years ago, despite working full time. I make more now, but probably less than you'd think based on the group here - I dont work in tech. The average salary for people with a college degree is about $50k: https://www.indeed.com/career-advice/pay-salary/average-salary-for-college-graduates https://www.indeed.com/career-advice/pay-salary/average-sala...
- treis 6y ago
  Most of these people have parents they can rely on to borrow car loan type money. Homes are out of the question at 30k a year anyway so it doesn't matter that they can't get a mortgage.
lm28469 6y ago
> It's actually somewhat rational. > Say you just graduated college and make 30k as a waiter. This is only rational in the US

by treis 6y ago

tpmx 6y ago

The sensible response from society is unfortunately restricting personal bankruptcy laws. Essentially this is an organized attack on civilized society and it needs to be shut down, somehow.

baq 6y ago
if this is the only alternative you can come up with, then you unfortunately suffer from a lack of imagination. another solution would be to make that $30k enough for a comfortable life so the bet doesn't seem that attractive in the first place.
- tpmx 6y ago
  I think you may have replied to the wrong comment?
  - cbozeman 6y ago
    No, they didn't. If you're so daft that you think its okay to give literally trillions of aid to companies in the form of tax breaks, bailouts, subsidies, and other horseshit, but letting people write off mere millions in bankruptcy proceedings because they know at a fundamental level that the system is - if not broken, definitely malfunctioning - then brother, you are part of the problem here.
treis 6y ago
In a country where we just handed out $50 billion dollars to airlines (again) a bunch of poor WSB tards abusing bankruptcy is not really a problem. Especially considering how predatory the CC companies et. al. are. It's like a zebra killing a lion with a lucky kick and thinking "tut tut we need to change the rules of the hunt".
- tpmx 6y ago
  Okay. Luxuary Space Age Communism it is. Everyone shall have all of the money. (I skipped a few obvious steps.)
TheCoelacanth 6y ago
The sensible response from society is to say "if credit card companies were foolish enough to give unsecured cash loans to these people, then that's their problem".
leetcrew 6y ago
or just double the amount of time that bankruptcy stays on your credit report and let the lenders handle it as they see fit. I will say I find your take rather dramatic. I don't see screwing over a couple hedge funds as an "organized attack of civilized society".

mywittyname 6y ago

I mean, it's still rational for professions too. If you make gamble and lose, then you just need to work a little longer to catch back up. But if you win, then you might never need to actually work again. Throwing $500-1000 a month into OTM options trading can generate life-changing amounts of money. That's like the lease payment on a 3 Series BMW. So it's pretty sustainable for working pros.

moneywoes 6y ago
But what is the expected value? You can lose way more than the principal no?
- xscott 6y ago
  > You can lose way more than the principal no? Not if you're buying options (calls or puts to open). Maybe you're thinking about short selling, or selling naked options.

ac29 6y ago

A 92% chance of bankruptcy (to use your example) seems like a poor idea. Its not about the outcomes of winning vs losing, the smart move is to not play. A college graduate hopefully will not be making $30k/yr for too long, and being almost completely cut off from credit for a decade is really going to sting when they do want to finance a car or other large purchase.

kyawzazaw 6y ago
> A college graduate hopefully will not be making $30k/yr for too long I think you might be in a well paying profession
- ac29 6y ago
  For what its worth, I made less than $30k/yr (with zero benefits) for a few years after graduating college about 10 years ago, despite working full time. I make more now, but probably less than you'd think based on the group here - I dont work in tech. The average salary for people with a college degree is about $50k: https://www.indeed.com/career-advice/pay-salary/average-salary-for-college-graduates https://www.indeed.com/career-advice/pay-salary/average-sala...
treis 6y ago
Most of these people have parents they can rely on to borrow car loan type money. Homes are out of the question at 30k a year anyway so it doesn't matter that they can't get a mortgage.

lm28469 6y ago

> It's actually somewhat rational. > Say you just graduated college and make 30k as a waiter. This is only rational in the US