News for hackers. Stuff that matters.

A comment on GameStop Is Rage Against the Financial Machine. Parent comment

Re:GameStop Is Rage Against the Financial Machine by chrchang523 on Wednesday January 27, 2021 @12:50PM (#25931338)
I've been keeping an eye on the far-out-dated put options, and I haven't seen anything that's more compelling than simply leaving money parked in an index fund. The expectation that GME will drop back down to Earth over that timeframe remains priced in.

The main takeaway from this incident is that margin-call-constrained short selling is even more dangerous than previously understood.

[ Parent | on HN ]
Re:GameStop Is Rage Against the Financial Machine by fairity on Wednesday January 27, 2021 @01:48PM (#25932159)
>The expectation that GME will drop back down to Earth over that timeframe remains priced in.

Yea, it does seem largely priced in, but perhaps not completely. If share price is $60 in 1 year, the ROI on that contract would be 9% -- so slightly better than what you'd reasonably expect an index fund to return. A $60 share price is higher than GME's all-time high prior this fiasco.

[ Parent | on HN ]
Re:GameStop Is Rage Against the Financial Machine by chrchang523 on Wednesday January 27, 2021 @02:18PM (#25932562)
The inferior tax treatment of put options relative to index funds also matters. Not tempted.
[ Parent | on HN ]