1766
you are viewing a single comment's thread
view the rest of the comments
view the rest of the comments
this post was submitted on 30 May 2024
1766 points (98.6% liked)
Technology
59385 readers
932 users here now
This is a most excellent place for technology news and articles.
Our Rules
- Follow the lemmy.world rules.
- Only tech related content.
- Be excellent to each another!
- Mod approved content bots can post up to 10 articles per day.
- Threads asking for personal tech support may be deleted.
- Politics threads may be removed.
- No memes allowed as posts, OK to post as comments.
- Only approved bots from the list below, to ask if your bot can be added please contact us.
- Check for duplicates before posting, duplicates may be removed
Approved Bots
founded 1 year ago
MODERATORS
I think you would be margin called and just have astronomical but not infinite debt.
Infinite and astronomical are used interchangeably here. Since you have to return a share to the person you borrowed it from, if you borrowed 1000 shares at $5 and sold them to make 5k, if the price jumps to something like $350 like gamestop, it would cost you $350,000 to cover them.
Making 5k to lose 350k might as well be an infinite loss ot that investor, even though its technically a "smallish" sum. At that scale, it would destroy most people.
You can also pay to keep a short going generally and try to wait out the madness, but you have to stay solvent to do it. The very stupid and very surprising "diamond handing" apes caused some hedge fund issues, although I think most just shrugged into other financial instruments.