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Are buyers of these stocks really exposed to more downside risk than the buyers of the way OTM options they sell to retail investors freely?
by rory 6y ago
Are buyers of these stocks really exposed to more downside risk than the buyers of the way OTM options they sell to retail investors freely?
- IG_Semmelweiss 6y agoOnly those that got in late and then chose to sell at a lower price than cost. However, and here is the problem - when the price does come down (likely after the shorts capitulate) , it will literally be a stampede to finally get out. It is unknown how sell orders will be processed... if at all at that point. So the later you get in the more likely you are to be burned, in the disordely unwinding scenario. Early adopters will be ok. Holders and latecomers will not.
- rory 6y agoMy point is, why is Robinhood still selling options that have a 95% chance to expire worthless, if their actual motivation is to protect their investors from high-risk trades?