Ask HN: How Do Puts Work?
I&#x27;m reading about Mark Spitznagel and Universa Investments, and in an article they put it as follows: &#x27;his trades, which cost almost nothing to put on during good times, can be sold at almost infinite prices.&#x27; Why?<p>If the price of stock A is now $20, and the put gives you the right to sell at $30, wouldn&#x27;t the put be worth $10? Or was at nearly infinite prices just an exaggeration? But even then I&#x27;m having a hard time understanding the massive returns they&#x27;ve claimed, unless there&#x27;s lots of leverage involved.