3 ms·
At $22,800 with unlimited downside if the stock goes up, that's a pretty expensive gamble.
by resolutebat 2y ago
At $22,800 with unlimited downside if the stock goes up, that's a pretty expensive gamble.
- reedf1 2y agoThere are many, many ways to construct the trade to limit the downside risk.
- greenavocado 2y agoThat's not true if you buy a single put option (it is 100 shares). If you sell a naked put option you're opening yourself up to unlimited losses potentially. Not to worry, most brokerages won't let you put in such an order unless you file some paperwork attesting to your level of trading experience, often referred to as Level 3 or 4. When you buy a put option, your risk is always limited to the premium paid, and nothing more. The upside is potentially unlimited profit. And I'm not even getting into the dozens of options architectures which optimize for specific trading theses.