Not with options. If you want to bet against a company you with options you can do it by either:
1. Buy a put. The put gives you the right to sell the stock at a certain price. If it goes below that price you make a profit, if it doesn’t your put is worthless. The maximum you can lose is what you paid for the put.
2. Sell a Call. This gives someone the right to buy the stock at a certain price (and you promise to sell at that price). If the stock is below that price your profit is what you sold the call. Your maximum loss is infinite since a stock price has no (theoretical) limit.
sigstoat|3 years ago
> Not with options.
you maybe meant to say "not when you buy options":
> 2. Sell a Call. This gives someone the right to buy the stock at a certain price (and you promise to sell at that price). If the stock is below that price your profit is what you sold the call. Your maximum loss is infinite since a stock price has no (theoretical) limit.
ALittleLight|3 years ago