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Throwing your whole bank account into call options would be an extremely risky thing to do. But that doesn’t invalidate your point that capital accumulation of
by jliptzin 5y ago
Throwing your whole bank account into call options would be an extremely risky thing to do. But that doesn’t invalidate your point that capital accumulation of wealthy people generally far outweighs any amount of money they would make from their labor. It doesn’t have to be call options though, with enough wealth even interest from T-bills would dwarf a $300k salary.
- fdgsdfogijq 5y agoYou are still missing the point. With QE, the call options are far less risky than they look. It has been this way for over a decade. People somehow cant get it into their heads, when the fed prints money, assets go up. Capitalists are having an all you can eat buffet while everyone else thinks the only thing they can do is put 3k into the SPY every month. Its a joke
- whimsicalism 5y agoYes, in "normal times" of the past decade, when you invest in call options, you are basically being compensated for discounting the risk of a crash at any particular moment. But there's no free lunch - the risk you are taking is being priced in, but sometimes the actually risky thing does happen. This line you keep repeating about "only the lower classes" xyz while the "true rich" have some deep wisdom is belied by the fact that rich people become not-so-rich trading options every day. It's straight out of the "this one trick they don't want you to know about" advertising playbook.
- jliptzin 5y agoI don’t think I am missing the point. If you had gone all in on call options in Feb 2020 you’d have lost 100% of your money (depending on expiration)