4 ms·

People still can get rich when BTC drops, if they shorted the market.

by lavventura 4y ago

JamesBarney 4y ago
Depending on your counterparty risk.
- kypro 4y ago
  And after accounting for the trading fees and the interest payments for borrowing to short.
- dibt 4y ago
  May not be an issue if shorting via CME BTC/ETH futures.
wollsmoth 4y ago
you can lose a lot of money trying to time options trades like that.
- nannal 4y ago
  Is shorting an option?
  - thewataccount 4y ago
    Shorting is different from an option. They are often confused because you can say you have a "short position" or a "long position" with either (long position would be buying shares). Most people are more familiar with buying puts or selling call options are superficially similar - you make money if the price goes down. Options give the holder the right to buy/sell a share at a specific price before a specific date. They expire worthless after that date. Shorts are immediately borrowing shares - not just the right to buy/sell shares. They do not generally expire, although they do have interest. GP said " if they shorted the market." which is a bit ambiguous, it sounds like they are talking about a literal short, but in this context they likely mean either. tl;dr - no they're different
    - nannal 4y ago
      I do hope wollsmoth reads that before continuing to provide his thoughts on the matter. Thank you for taking the time to inform those who may not be aware & I don't disagree with anything you wrote.
      - wollsmoth 4y ago
        yeah, I mostly know about puts and calls. I read around, you can borrow shares but the interest rate can be a little crazy so I'm not sure it's a better long term strategy than just getting/creating options contracts every n months. You're definitely going to pay for the risk one way or another.
        thewataccount 4y ago
        Over simplified, otherwise it's too complex for this explanation, if you're trading please don't use my explanation - Buying either cash-secured Puts or Calls are not subject to margin-calls like shorts/long shares are. So if the price goes up too high before it comes crashing down, your broker might force you to liquidate your position, leaving you with max loses, and no profit from the following crash. Because puts or calls do not rely on margin and you get to choose if you execute them, so they are more resistant to massive spikes in either direction. tldr - Purchased options are not subject to margin calls like shorts edit: removed mentions of selling options and IV - they're too complex for this quick explanation
- lavventura 4y ago
  I did lose money, even when I shorted with 1x leverage. The crypto pumped 3x in few hours. Sometimes trading against Binance's bots like playing chess against a chess master who cheats a lot. But with smart moves, some luck and patience there are some trading enterance points that may bring you some gains.
paxys 4y ago
Good luck collecting from the exchange that is now out of business.

People still can get rich when BTC drops, if they shorted the market.

JamesBarney 4y ago

Depending on your counterparty risk.

kypro 4y ago
And after accounting for the trading fees and the interest payments for borrowing to short.
dibt 4y ago
May not be an issue if shorting via CME BTC/ETH futures.

wollsmoth 4y ago

you can lose a lot of money trying to time options trades like that.

nannal 4y ago
Is shorting an option?
- thewataccount 4y ago
  Shorting is different from an option. They are often confused because you can say you have a "short position" or a "long position" with either (long position would be buying shares). Most people are more familiar with buying puts or selling call options are superficially similar - you make money if the price goes down. Options give the holder the right to buy/sell a share at a specific price before a specific date. They expire worthless after that date. Shorts are immediately borrowing shares - not just the right to buy/sell shares. They do not generally expire, although they do have interest. GP said " if they shorted the market." which is a bit ambiguous, it sounds like they are talking about a literal short, but in this context they likely mean either. tl;dr - no they're different
  - nannal 4y ago
    I do hope wollsmoth reads that before continuing to provide his thoughts on the matter. Thank you for taking the time to inform those who may not be aware & I don't disagree with anything you wrote.
    - wollsmoth 4y ago
      yeah, I mostly know about puts and calls. I read around, you can borrow shares but the interest rate can be a little crazy so I'm not sure it's a better long term strategy than just getting/creating options contracts every n months. You're definitely going to pay for the risk one way or another.
      - thewataccount 4y ago
        Over simplified, otherwise it's too complex for this explanation, if you're trading please don't use my explanation - Buying either cash-secured Puts or Calls are not subject to margin-calls like shorts/long shares are. So if the price goes up too high before it comes crashing down, your broker might force you to liquidate your position, leaving you with max loses, and no profit from the following crash. Because puts or calls do not rely on margin and you get to choose if you execute them, so they are more resistant to massive spikes in either direction. tldr - Purchased options are not subject to margin calls like shorts edit: removed mentions of selling options and IV - they're too complex for this quick explanation
lavventura 4y ago
I did lose money, even when I shorted with 1x leverage. The crypto pumped 3x in few hours. Sometimes trading against Binance's bots like playing chess against a chess master who cheats a lot. But with smart moves, some luck and patience there are some trading enterance points that may bring you some gains.

paxys 4y ago

Good luck collecting from the exchange that is now out of business.