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The Something Awful Forums > Discussion > Video Games > Stonks: Shortin' The Hedgefund
 
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Foxfire_
Nov 8, 2010

Mister Facetious posted:

If you go short, it's entirely possible for a stock to rise far, far beyond the price you borrowed it at, for longer than your borrowing period.
You can limit that, it just costs some money. Simplest way is that when the stock's at $10 and you are doing the short, you also buy an option to hedge the risk. The option is going to someone who has a share and saying "I will pay you a nickel for the right to buy that share anything in the next month for $50". Then you have a fixed-price source to go from owning -1 shares of gamestop to 0 shares of gamestop in case the price goes up instead of down.

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The Something Awful Forums > Discussion > Video Games > Stonks: Shortin' The Hedgefund