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Anonymous
It can't really be this easy can it? 2016-10-29 20:30:37 Post No.
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It can't really be this easy can it? 2016-10-29 20:30:37 Post No.
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I am not very informed on all of this stuff but I've been reading a book on derivatives and hedging. It claims that it is without risk if you:
Long spot and short forward contract
It can't really be this easy can it?
Say 1000 shares of XYZ for $150/share.
Short contract for $160/share, and long spot at $150.
What goes wrong?
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>What goes wrong
you don't get interest on your 1000 shares of shitty stock
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>>1592830
That's called a straddle.
Nick Lesson thought they were a low risk way for him to recover losses he had made through unauthorized trading at work. Low risk, low reward, so you need to move a lot of money through it. Then one day the risk caught up with him.
He ended up bankrupting Barings Bank.
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>>1592830
Yep! Go ahead and do it op! Literally nothing can go wrong and you will wake up tomorrow a millionaire!
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>>1592830
do it
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>>1593020
Mm it is referring to forward contracts not options, they appear to be different from first search. I am only on forward strategies and valuations right now so I could be wrong. I know it's not all 100%, am just wondering if anyone has any immediate downsides off the top of their head while I continue reading
>>1592847
I see
>>1593031
>>1593104
Thanks for the support boys, will do!
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>>1593020
Ah looked up bank and I see. For some reason there was a distinction made on straddle being only option on first site I saw.
Hmm he didn't seem to be hedging his bets according to Wikipedia but still a great read, thank you.
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