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by alexcnwy 3113 days ago
It can also lose 20x. Losses hurt more than gains feel good. Utility theory suggests to sell if probability weighting of loss is high enough.
1 comments

How? If the value goes to 0 you lose 1x, not 20x.
It can become worth 1/20 of it's original value.
Going to $0 is -Inf% loss.
Then if I lose 100% of my investment, how much have I lost?
Everything.

Sometimes its easier to describe this in terms of words, than numbers and symbols.

Everything is not that bad. Many people lose more than that on the regular stock market (using leverage).
Usually there is margin liquadation levels that are in place so you can't lose ore than 100%.