3 ms·
Correct. You are on the hook for 1x, not 20x, your down payment. This is asymmetric leverage in favor of the buyer.
by runako 5y ago
Correct. You are on the hook for 1x, not 20x, your down payment. This is asymmetric leverage in favor of the buyer.
- shapefrog 5y agoIt is a fair point that for small negative changes you are getting a leverage effect (i.e. for a 1% down move in asset value you do have a 20% loss on your capital). There is however a floor so the payout profile is a lot more like an option.