[mattmaroon]

It’s unlimited because in the time he is holding cash there’s no limit to the amount the stock market could increase. If he sells a stock for $10, and then it goes from $10 to $10,000 he’ll only be able to buy back 1/1,000th of what he had. He lost $9,990.

It’s the same as writing call options. There’s defined upside and unlimited downside.

[gowld]

By that theory everything has unlimited loss potential.

"Loss potential" (downside risk) in finance refers to money you lose, not money you could have made by doing something else.

https://www.investopedia.com/terms/d/downsiderisk.asp

[mattmaroon]

Yeah I was just explaining what I was pretty sure he meant.