No, I don't think it does. Rather it massively exposes them. That is kind of the point.
That is why several trading platforms told the "small investor" to fuck off and die when the gamestock thing was going on.. Because it was going to damn near bankrupt several large hedge funds that thought they had a sure thing (corrupt intentional bullshit).
So they are the one that sold the put, not bought it? I'f I am getting this right, the person that buys a put is saying that they will pay someone else a fee if the other person agrees, and is required to buy something from the buyer at a set price at a date of the buyer's choosing not to exceed a limit, but the buyer is not obligated to sell it. So at most the buyer could lose is whatever the fee is, and what ever the difference of the set price is, IF the set price is below the market value.
They tired to "short" it. I am tired so I might get this wrong but this is the simple version.
"Rent/borrow" a stock a a price hoping that it is going to go down. If it stays the same or goes up you are liable for the cost change. If it goes down, you make a profit since you "rent" it at a lower price. More or less. It is kind of stupid but apparently works sometimes.
So, if people buy in and the price goes up. You get fucked. If people dump the stock then you make bank.
(post is archived)