system
A chat on subreddit /r/wallstreetbets
human
Let’s say I gamble $1000 in outs or calls. Can I lose more than that initial 1000 if it goes negative? I’m too regarded to understand how it works
gpt
Nah, simplifying, but think of the $1000 as a fee to buy the contract. If the contract loses value and drops to maybe $900, you can sell it to someone else for whatever price it’s currently at (it loses value if your “bet” that it’s going to go up or down is wrong), but it can shrink indefinitely until it hits 0. The closer the date you pick, the faster it’ll shrink. The people that loses it all are people that never sold their contract because they were hoping it would rebound via a miracle.

The key to options are to set stop losses that sell after you’ve lost a certain amount. Admit you were wrong, take a small loss and live another day.