When you short...
Your stake is basically the maximum you can make. You are selling shares someone else owns at today's price with a promise to buy the shares back within a certain time period and hand them back. You then trouser the difference.
The most he could have made was 65k.
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Draconacticus Reject shampoo. Demand real poo!, Fri 21 Apr 2017, 10:36,
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That assumes the share price drops 100% to zero.
Under such extreme circumstances I think the deal might just be null and voided in the small print.
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Prufrock Lucifer, son of the morning!, Fri 21 Apr 2017, 10:40,
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Indeed it does.
Seems like a huge amount of effort and risk for a maximum potential gain of 65k.
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Draconacticus Reject shampoo. Demand real poo!, Fri 21 Apr 2017, 10:46,
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I was surprised he could find a bank or fund to short with when his capital was so low and was leveraged.
Anyway, this game is about yield not the pound note figure.
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Prufrock Lucifer, son of the morning!, Fri 21 Apr 2017, 10:51,
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And now he can look forward to yielding his bum in the prison showers for the rest of his life.
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Draconacticus Reject shampoo. Demand real poo!, Fri 21 Apr 2017, 11:00,
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yes, but it's always leveraged.
In this case he was trading options contracts - which are leveraged anyway - and probably trading on margin so perhaps a tenth of the contract up front.
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The Ann Coulter Fan Club Babylon is burning at, Fri 21 Apr 2017, 12:06,
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Yes.
What I meant was he had no capital at all so he took a loan to even get the deal set up.
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Prufrock Lucifer, son of the morning!, Fri 21 Apr 2017, 12:19,
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So really he stood to make fuck all.
He should have just mugged old ladies coming out of the post office.
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Draconacticus Reject shampoo. Demand real poo!, Fri 21 Apr 2017, 12:28,
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