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I've been keeping an eye on the far-out-dated put options, and I haven't seen anything that's more compelling than simply leaving money parked in an index fund.
by chrchang523 6y ago
I've been keeping an eye on the far-out-dated put options, and I haven't seen anything that's more compelling than simply leaving money parked in an index fund. The expectation that GME will drop back down to Earth over that timeframe remains priced in.
The main takeaway from this incident is that margin-call-constrained short selling is even more dangerous than previously understood.
- fairity 6y ago>The expectation that GME will drop back down to Earth over that timeframe remains priced in. Yea, it does seem largely priced in, but perhaps not completely. If share price is $60 in 1 year, the ROI on that contract would be 9% -- so slightly better than what you'd reasonably expect an index fund to return. A $60 share price is higher than GME's all-time high prior this fiasco.
- chrchang523 6y agoThe inferior tax treatment of put options relative to index funds also matters. Not tempted.