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by tomp
2879 days ago
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Options aren't "an investment", think of them more like "gambling". So the 3k is the "fee" (non-refundable), and the "winnings" depend on the price of the stock at a predefined date. In this case, the parent would buy a put option, which would pay out only if, and proportionally to the amount that, the stock is lower than some predefined price (usually the present price with a small delta). |
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