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by mrfredward
1957 days ago
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"Expected value" is a well-defined term from statistics: "In statistics and probability analysis, the expected value is calculated by multiplying each of the possible outcomes by the likelihood each outcome will occur and then summing all of those values." This explanation is from investopedia no less. Anyway, shorting gamestop has some probability distribution that includes every outcome from making a bunch of money to losing your shirt because of a viral meme (shorting losses have no theoretical limit). That distribution can simultaneously have positive expected value and also be an unattractive bet because of the risk involved...and that's before we talk about shorting fees. |
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