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3

If that was how it worked, then I’d short 10 million dollars worth of Bitcoin, take the money and head straight to Panama which doesn’t have extradition treaties with any country, and spend the rest of my life supporting the economy there.


0

TL;DR: Over time, "everyone" will not make money by shorting VXX. Shorting requires holding an account balance (margin requirement) roughly equal to the short position size. The precise amount can be higher or lower, but what happens next is the same: If the value of your shorted VXX shares happens to move up higher than the available balance, you ...


38

The key concept is margin requirement. Conceptually, when shorting, you are indeed credited with $60k and negative 1 bitcoin. However, first of all, you cannot simply create such a position from an empty account -- any more than you can go long from an empty account and have 1 bitcoin and negative $60k. In either case, in order to borrow (bitcoin or cash), ...


11

Think of it this way: when you short Bitcoin you are betting that Bitcoin will fall, and you are taking the risk that it won't (you will still be liable to "return what you borrowed" even if the price rises, in which case you will have to buy it back at a loss in order to be able to return it.) If the exchange gave you the money as soon as you ...


3

Actual options on futures do exist (described in SRiverNet's answer), but this doesn't seem to be what you're referring to. Rather, you're drawing an analogy between a short futures contract and a short call option. You are correct that the risk of a large loss from a short futures contract is offset by owning a corresponding quantity of the underlying. But ...


0

Here's an answer for you: To cover the risk of a short call position, at any time prior to the options expiration, a trader can buy a futures contract to deliver to the call owner if the short call is exercised. Owning the futures contract to deliver into the call means that the assignment risk is covered; hence the phrase covered call. This comes from: ...


0

Nationalization carries a broad range of meaning. In some cases a government might choose to nationalize a company or even an entire industry (Jose Lopez Portillo did this in Mexico in the 1980s when he nationalized the banks to seize the dollar accounts that Mexican citizens could keep in Mexican banks) and provide compensation in whole or part, or maybe ...


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