4 ms·

You and your broker have to be pretty damn brazen to iron grip a highly liquid stock all the ways down to -95%.

by WarmWash 4mo ago

inigyou 4mo ago
Shorts can go down to -1000% and beyond.
- KellyCriterion 4mo ago
  Not true: Depending on product and regulatory regime, for distinct trader/customer groups there may be distinct rules. And if you are buying an instrument where you can lose more than you invested, the approach maybe wrong? :-)
  - gottorf 4mo ago
    > And if you are buying an instrument where you can lose more than you invested, the approach maybe wrong? :-) This is precisely why shorting can lose more than you "invest", because you're not buying an instrument, you're selling it with the intent (or promise, depending on what kind of instrument it is) to buy it back later, hopefully at a lower price. The risk is unbounded.
    - formvoltron 4mo ago
      dang all these comments make me want to short more. gimmie your monies! a company who says we'll have ai in space, meanwhile you can stick ai in the ocean and use ocean water to cool & still have access for upgrade cycles. meanwhile china and japan and bezos all landing reusable rockets. meanwhile maybe ai runs locally on phones (today's announcement of deepseek in the iphone in china) ummmm. short in force!
    - KellyCriterion 4mo ago
      Not true: https://en.wikipedia.org/wiki/Turbo_(finance) https://en.wikipedia.org/wiki/Turbo_(finance) There are, as said, depending on juristic regime, products which do not let you lose more than you invested. On top of this comes national regulation: E.g. in some EU countries, retail traders are exempt from s.c. "margin calls" and the broker is required by regulation to "just close and not ask for more" Source: Im living in one of these EU countries
      - inigyou 4mo ago
        A turbo is not a short position. It is more similar to an option.
        KellyCriterion 4mo ago
        and an option is not "a position" then? :-)
      - gottorf 3mo ago
        I'm not familiar with turbos, but to me it sounds like a CFD? How does a short position on a turbo prevent you from losing more than what you "put in"[0]? If you're shorting underlying X at price Y with a turbo, and price moves to Y+10, you're going to lose 10 times the leverage factor. You could have stop orders, but those are not guaranteed to fill at a price that would cap your loss to a desired amount. > the broker is required by regulation to "just close and not ask for more" Some American brokers will also forcibly close your position instead of issuing a margin call. Do you mean that under those national regulations, the broker is required to eat the losses? [0]: in quotes, since with a short position it's not really the case that you put something in.
        KellyCriterion 3mo ago
        It is somehow comparable but with a CFD you are betting against the market maker /issuer of the CFD, while with a turbo you bet against the market directly - the issuer is just arranging the countposition in the background. The loss is implemented by a knockout value, depending on your leverage. In all EU countries there is no margin call allowed for retailers, but this is not relevant for turbos anyway. The loss is included in the deprecation of the price of the turbo, the issuer is just the middleman, being neutral. Compared to a CFD issuer, which can print whatever price it wants. With a turbo, the price of the turbo instrument is connected by a simple formula with the underlying price. A turbo has an ISIN, and is highly regulated by the Financial Supervision Authorities. Actually, turbos are a professoinal instrument but they are sold to retailers as well in most countries.
        KellyCriterion 3mo ago
  - KellyCriterion 4mo ago
    ...downvoted 2 times for telling the truth about EU or LATAM regulatory regmies, wow,thanks :-D
- WarmWash 4mo ago
  Yes, but you have to hold through that, and your broker also needs to let you hold through it.
- WarmWash 4mo ago
  Yes, but you have to hold through that, and your broker also needs to let you hold through it. The risk of a stock like spaceX gapping up 10x in an instant is virtually zero.
  - inigyou 4mo ago
    So if I wouldn't lend someone 9 times their assets I can't let them have that position.

You and your broker have to be pretty damn brazen to iron grip a highly liquid stock all the ways down to -95%.

inigyou 4mo ago

Shorts can go down to -1000% and beyond.

KellyCriterion 4mo ago
Not true: Depending on product and regulatory regime, for distinct trader/customer groups there may be distinct rules. And if you are buying an instrument where you can lose more than you invested, the approach maybe wrong? :-)
- gottorf 4mo ago
  > And if you are buying an instrument where you can lose more than you invested, the approach maybe wrong? :-) This is precisely why shorting can lose more than you "invest", because you're not buying an instrument, you're selling it with the intent (or promise, depending on what kind of instrument it is) to buy it back later, hopefully at a lower price. The risk is unbounded.
  - formvoltron 4mo ago
    dang all these comments make me want to short more. gimmie your monies! a company who says we'll have ai in space, meanwhile you can stick ai in the ocean and use ocean water to cool & still have access for upgrade cycles. meanwhile china and japan and bezos all landing reusable rockets. meanwhile maybe ai runs locally on phones (today's announcement of deepseek in the iphone in china) ummmm. short in force!
  - KellyCriterion 4mo ago
    Not true: https://en.wikipedia.org/wiki/Turbo_(finance) https://en.wikipedia.org/wiki/Turbo_(finance) There are, as said, depending on juristic regime, products which do not let you lose more than you invested. On top of this comes national regulation: E.g. in some EU countries, retail traders are exempt from s.c. "margin calls" and the broker is required by regulation to "just close and not ask for more" Source: Im living in one of these EU countries
    - inigyou 4mo ago
      A turbo is not a short position. It is more similar to an option.
      - KellyCriterion 4mo ago
        and an option is not "a position" then? :-)
    - gottorf 3mo ago
      I'm not familiar with turbos, but to me it sounds like a CFD? How does a short position on a turbo prevent you from losing more than what you "put in"[0]? If you're shorting underlying X at price Y with a turbo, and price moves to Y+10, you're going to lose 10 times the leverage factor. You could have stop orders, but those are not guaranteed to fill at a price that would cap your loss to a desired amount. > the broker is required by regulation to "just close and not ask for more" Some American brokers will also forcibly close your position instead of issuing a margin call. Do you mean that under those national regulations, the broker is required to eat the losses? [0]: in quotes, since with a short position it's not really the case that you put something in.
      - KellyCriterion 3mo ago
        It is somehow comparable but with a CFD you are betting against the market maker /issuer of the CFD, while with a turbo you bet against the market directly - the issuer is just arranging the countposition in the background. The loss is implemented by a knockout value, depending on your leverage. In all EU countries there is no margin call allowed for retailers, but this is not relevant for turbos anyway. The loss is included in the deprecation of the price of the turbo, the issuer is just the middleman, being neutral. Compared to a CFD issuer, which can print whatever price it wants. With a turbo, the price of the turbo instrument is connected by a simple formula with the underlying price. A turbo has an ISIN, and is highly regulated by the Financial Supervision Authorities. Actually, turbos are a professoinal instrument but they are sold to retailers as well in most countries.
      - KellyCriterion 3mo ago
- KellyCriterion 4mo ago
  ...downvoted 2 times for telling the truth about EU or LATAM regulatory regmies, wow,thanks :-D
WarmWash 4mo ago
Yes, but you have to hold through that, and your broker also needs to let you hold through it.
WarmWash 4mo ago
Yes, but you have to hold through that, and your broker also needs to let you hold through it. The risk of a stock like spaceX gapping up 10x in an instant is virtually zero.
- inigyou 4mo ago
  So if I wouldn't lend someone 9 times their assets I can't let them have that position.