Comment by fossuser
4 years ago
Yeah, I'm pretty confident Nikola is a total fraud that will go to zero but it's still hard to make money even knowing that.
How long will the fraud last? Isn't your return limited by the difference available under the put?
I generally stick to calls because it's way easier to make money in a company you know is good and it's easier to capture the upside (Peloton for me recently).
Market seems skewed this way, it's a lot harder to correct the price even when you know it's total bullshit. Seems likely to allow frauds to go on longer.
> Isn't your return limited by the difference available under the put
It is. Max profit when stock prices hits zero. It can be still a massive return compared to the premium invested.
Assuming the house of cards falls before expiration, of course.
Premiums are rather high on NKLA puts too.
How is Peloton a good company can you please explain?
- Really good product (most important).
- Subscription model makes sense and is sticky with good margins.
- Undercuts gyms while providing better experience.
- Well timed growth during pandemic.
If I use a product and think it's really excellent I'll check out the stock and the company. This has largely worked for Apple, Tesla (bought in 2012), and now Peloton.
Peloton is actually really good. I subscribe to their digital service for 12.99 a month and you get to access all the classes. Basically like online bootcamp/yoga. Not sure why the consensus overlooks this part and focuses on their expensive hardware (I don’t have any of that).
Fair enough let me know next time you like a product :)