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A comment on Some of the world's biggest economies are on the brink of recession. Parent comment

Re:Some of the world's biggest economies are on the brink of... by jkhdigital on Sunday February 23, 2020 @12:38PM (#22398202)
This wisdom was clearly conceived before the advent of widespread, liquid options markets. Purchasing options requires no leverage and thus bears no risk of becoming "insolvent". Of course, trading against stubbornly irrational markets via options can be quite expensive so there is a substantial price to pay for capping one's downside risk.
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Re:Some of the world's biggest economies are on the brink of... by thaumasiotes on Sunday February 23, 2020 @01:11PM (#22398440)
> Purchasing options requires no leverage and thus bears no risk of becoming "insolvent". Of course, trading against stubbornly irrational markets via options can be quite expensive

I didn't realize it was impossible to become insolvent just by spending money.

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Re:Some of the world's biggest economies are on the brink of... by odyssey7 on Sunday February 23, 2020 @12:47PM (#22398256)
Options are priced by the same market forces that a speculator attempts to time. You can always lose the price you pay for the options, although you can avoid insolvency by not buying more than you can afford to lose.
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