A Nikkei study found Alphabet, Microsoft, Amazon, Meta and Oracle carry $1.65tn in off-balance-sheet debt for AI, more than they report. It is all legal.
Those are reasons why loses aren’t as big of a concern for rich people. Not why hedges are only for rich people.
The cost of a hedge is proportional to the assets being protected. If someone has say a $10,000 portfolio of stocks, and they think the market will crash in the next month or two, they could buy a protective option hedge for around $100. And if someone has a portfolio of $300 million, they could hedge for ~$3 million. Wealth is irrelevant.
Also hedges aren’t risky. They reduce risk. They’re insurance.
well if you’re rich and you lose a bundle it wont be a big of a deal, that’s why.
hedges are risky, and it’s much easier to take risks if you have a large cushion to fall on when you fall.
Those are reasons why loses aren’t as big of a concern for rich people. Not why hedges are only for rich people.
The cost of a hedge is proportional to the assets being protected. If someone has say a $10,000 portfolio of stocks, and they think the market will crash in the next month or two, they could buy a protective option hedge for around $100. And if someone has a portfolio of $300 million, they could hedge for ~$3 million. Wealth is irrelevant.
Also hedges aren’t risky. They reduce risk. They’re insurance.