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A comment on Ask HN: Why be an option/futures/day trader when it is zero-sum?. Parent comment

Re:Ask HN: Why be an option/futures/day trader when it is ze... by chwolfe on Thursday May 15, 2008 @04:37PM (#190916)
Correct. There is a big difference in leveraging options when you own tons of stock in a company vs. using options as a high class lotto ticket.

Example: Mark Cuban used options to guarantee he would be set for life no matter what happened to Yahoo's stock after they bought Broadcast.com for $5 billion (in stock mostly).

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Re:Ask HN: Why be an option/futures/day trader when it is ze... by llimllib on Friday May 16, 2008 @10:33AM (#191802)
> Mark Cuban used options to guarantee he would be set for life no matter what happened to Yahoo's stock

Care to explain further, or point me to where I can read more?

Edit: I think the "equity collar" article linked below sorted me out.

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Re:Ask HN: Why be an option/futures/day trader when it is ze... by chwolfe on Friday May 16, 2008 @04:32PM (#192196)
http://www.fastcompany.com/magazine/63/fasttalk.html

"The basic worry that comes with having lots of money is no different from what worries everyone else. Whether you've got $100 or $100 million, you don't want to lose it. After we sold Broadcast.com, I hedged my stock with synthetic indexes, in case the market cratered in the six months before I could hedge my actual Yahoo shares. It cost me $20 million, but I protected what I had. Todd Wagner and I had a credo: "Pigs get fat; hogs get slaughtered.""

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