TSLA
PLTR
HIMS
SPCX
SOFI
META
BTCNo leverage, ever
Borrowed money turns a bad month into the end of the game
$20 billionlost by Archegos in two days, investing with borrowed money
Why it matters
Market risk has fat tails: huge falls come far more often than the models say.
Try it yourself
Counts as leverage
- A margin loan of $1Any margin loan counts, however small.
- Selling puts without the cash to buy every sharePuts without the cash behind them are borrowed money in disguise.
- A product that makes you buy double if the price falls, with cash for only halfCount the worst case: if it can double, count it doubled.
Doesn't
- Selling a put with cash set aside for every shareCash covers the worst case.
- A Turbo Range position funded with USDCNothing borrowed and no liquidation: a filled position holds only the on-chain stock.
- Four stocks you own outright, with no loansNothing borrowed, nothing owed.
4 of 5