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Comment by panarky | Hacker News Reader

Since he bought his puts on 6/26, BTC is up 9.5%, MSTR is up 9.9% and COIN is up 13.5%.

He's already pretty deep underwater.

If you are betting something will tank then you don't time the market to get to put at the best price. Buying these puts either pays out a lot if there is a giant dive before they expire or is a cost to cover that time period.

Timing is everything, being early is the same as being wrong.

Is he underwater? Aren't the put options that he bought previously just not cheaper now?

On options being underwater: "Underwater stock options have an exercise price which is greater than the market price of the underlying stock." Is that his situation?

To be "short" you can sell borrowed equities, sell calls that you write, or buy put options. Buying put options will cap your risk at the option price (I think underwater just meant "lost lots of money" - more likely to go out of bounds with the first two kinds of short positions)

Sorry, but no.

Those three are all 'bearish' strategies, but "going short" is selling something you don't have. Buying put options isn't short selling, although both are anticipating a decrease in the value of something.

Underwater is the term for a contract or asset that is worth less than its notional value.

https://www.investopedia.com/articles/trading/092613/differe...

https://www.investopedia.com/terms/u/underwater.asp

Thanks for the clarification. I used "short" in quotes as that was the article terminology.

If the asset he has bought is now cheaper, then yes he is "underwater" (i.e he has lost money on a mark-to-market basis - if he was to close out he would crystallize a loss)

This is the "return to normal" pump before the crash.

What crash, why?

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