Crypto simply followed the overall market effects. People cashed out with the economic downturn on the profits they made, just as they did the stock market.
Also, practically every asset class has a member that went to zero. The question is what fraction, and how did the others do. If you bought a basket of super-risky assets, over the past years, they went up like crypto and down less.
"decile" means 10%, are you intending to claim that the riskiest 10% of stocks are down on average at least 1000%? That seems like a pretty strong claim that needs some backing...
Options very well can be down more than 100%. It's a leveraged bet and a very common vehicle in traditional finance. So much so you can buy/sell them on platforms like Robinhood.
> a leveraged bet and a very common vehicle in traditional finance
Former options market maker here. Taking leveraged, directional risk with options is textbook reckless trading. That Robinhood found people to swing options and crypto is not representative of traditional finance.
I have an options account with TD Ameritrade. It took a few clicks to get. But it's pretty convenient traditional finance can be redefined when needed.
This doesn't change what the GP said. I have an options account with my bank too, but I had to sign all kinds of disclosures and wait to be approved. I also had to demonstrate a minimum net worth.
What made Robinhood (originally) unique was stripping away those protections, or otherwise automating them away in a mobile app. We have lots of concrete examples of people losing their life's savings on Robinhood, in no small part because of how easy it made leveraging oneself.
You are right. If you are referring to the GP of my post I agree with them - there are many growth stocks down more than crypto at the moment. That was what I was trying to say but did so poorly. I was just clarifying what I meant by thousands of % since I was thinking of options when I wrote it.
Your knowledge around opening an options account is slightly outdated. They used to have net worth requirements and more legal forms. Some time around 2020 though at the beginning of the pandemic all of this was removed. It's a few clicks now at pretty much any major investment bank such as TD Ameritrade.
Sure if you are being pedantic you got me. I was just trying to make the point that there are very risky positions you can hold in traditional finance as well and you can be down thousands of percent.
> Crypto is performing far worse than even the riskiest decile of the stock market. Which should surprise nobody.
> This is not true. The riskiest stocks are down thousands of %.
I mean, sure looks like you were trying to argue that crypto isn't performing worse than the riskiest decile of the stock market, which just isn't true at all.
It is though. There are plenty of growth stocks down 80%. Many of which were being pushed heavily by the Youtube finance crowd. The same ones peddling FTX (cough)...
Just because you can find some individual stocks that are down 80% (and keeping in mind that 80% != thousands lol), doesn’t mean that the most volatile decile of the stock market hasn’t outperformed crypto.
The iShares Small Cap Growth ETF (which is a probably a decent proxy for the most volatile companies in the market) is only down 13% on the year.
A long position in an option can't be down more than 100%.
The only commonly traded way to lose more than you started with are futures (not available on most retail platforms) and CFDs (not legal in many markets, including the USA).
Selling an uncovered call in theory (or selling a stock short) opens you to infinite losses - though brokerages are loathe to give you this capability it does exist.
Sure, but that's not what's being discussed in this thread.
"The riskiest stocks are down thousands of %" is untrue regardless of whether that position was in regular shares or /r/WSB style 10,000 calls expiring Friday.
This is true but all that it proves is that Bitcoin is incredibly volatile.
It seems like the pro-crypto arguments end up being circular sometimes (not from the same person but the community).
If the market is good, it's a great investment.
If the market is bad, buy the dip!
If it's unstable, remember all thos people who made money?
If it's stable, well it's a currency after all.
There are so many people who view crypto differently there's always someone there to sing it's praises. I'll still have no idea what crypto is supposed to be aside from a vehicle for fraud.
