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It'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 fo
by jedimind 5y ago
It'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]