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> I guess he's betting on prices generally headed down over the next 10 months, so he significantly underpays if things go per plan. Yes, exactly that! And if
by DelaneyM 4y ago
> I guess he's betting on prices generally headed down over the next 10 months, so he significantly underpays if things go per plan.
Yes, exactly that! And if one is betting on prices generally going down over the next 10 months one should just not enter the market at all.
- bombcar 4y agoOr if you’re not sure but want to hedge buy now and buy some puts also.
- DelaneyM 4y agoIf you're just "not sure", buying puts wouldn't help. Running puts & long on a single equity is assuming a specific yield shape. A good example would be an upcoming test result report for a pharmaceutical - it's either going strongly and gradually up (long) or suddenly and significantly down (put), but not gradually down (in which case you'd be out on both puts and longs). But yeah, at this point you're a super-sophisticated investor and all of this discussion is meaningless. :)