from Hacker News

Credit Suisse Fund Liquidated, ETFs Halted as Short-Vol Bets Die

by onecooldev24 on 2/6/18, 6:52 PM with 13 comments

  • by csense on 2/7/18, 10:39 PM

    TLDR, a bunch of people lost their money placing a bet on a number that comes out of a complicated formula involving stock prices.

    The article's handwringing because their number might have included "novice retail investors" who didn't understand what they were buying, and only bought it because it's been a winning bet for a while.

    If you don't fully understand a financial or investment product, you shouldn't buy it. Financial products involving words like "leveraged" or "options" or "cash-settled futures" are quite often more like bets than investments, and you should only trade them if you fully understand the product you're trading and are willing to accept that losing the bet may mean losing all the money you put in.

  • by tfolbrecht on 2/7/18, 2:19 PM

    If you're using leverage, and not able to lose more money than the fixed amount of shares you purchased, how else would it work?

    These instruments are a way to do fancy portfolio balancing, not bets and speculation. You'll need "real" leverage where you can come out in the negative instead of $0 to do that.

  • by amerine on 2/7/18, 3:44 AM

    Can someone help me understand what this is?
  • by snissn on 2/7/18, 6:20 AM

    Stock twits co-founder is mad about this https://twitter.com/howardlindzon/status/961094748151918592