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the same is happening with robinhood, especially with options. people are betting large sums on options that expire the same day
by ffggvv 5y ago
the same is happening with robinhood, especially with options. people are betting large sums on options that expire the same day
- tharne 5y agoOptions are terrifying. I don't think retail investors should be allowed to short stocks. Very few people understand the concept of an unlimited downside.
- jedimind 5y agoIt's clearly you who is not understanding how shorting with options works, since the downside is limited and NOT unlimited as you wrongly claim. Buying puts for let's say $500 let's you short a stock, now if the stock moves up, you can lose 100% ( if it doesn't come down within expiry ) but you can't lose a single cent more than that. One way to have unlimited downside is naked shorting.
- crent 5y agoUnless you sell uncovered calls… that gives you unlimited downside risk and limited upside since a stock can theoretically go to infinity. It’s not technically shorting but you are making a bet that the stock will remain the same price or lower.
- che_shirecat 5y ago100%. however, naked or uncovered calls and puts are almost always put past level 4 trading approval. counter to GP's claim, there's no way you can accidentally stumble into trading these.
- ABeeSea 5y agoRobinhood doesn’t support naked positions at all.
- deleted 5y ago[deleted]
- che_shirecat 5y agosounds like you don't understand it either. put options let you sell short a fixed amount of stocks without the unlimited downside. other types of options with unlimited downside are heavily restricted by brokers (b/c of underlying regulation) and not available to the average user without going through trading approval processes where they make the risks very clear.
- tharne 5y agoI understand options, and certainly using puts to cover the downside. I'm just paranoid about accidentally f*king that up and taking a bath to end all baths.
- protoax 5y agoYou’re only talking about one side of the equation. Buying options can never end in a loss that exceeds the original investment.
- deleted 5y ago[deleted]
- ABeeSea 5y agoThere is no unlimited downside with options. The worst case scenario is losing the amount you paid for the contract.
- bongoman37 5y ago
- anfogoat 5y agoI'm game. As long as retail means everyone except institutions. So, it doesn't matter how much wealth you have, what credentials you tout, if you're a GS alumni, or if you're Nancy Pelosi's husband. Because a financial regulation where retail was something other than an euphemism for lower classes would be a world first.
- bigyellow 5y agoExactly the opposite is true. Options are easy to understand and they have unlimited upside.
- tanseydavid 5y ago>> options are easy to understand I know some really smart people. No one I have ever met "groks" options quickly because they are not at all easy-to-understand.