XpresSpa Group Inc (XSPA)

[coolerheadsprevail]

@xlt,

There may be an obvious answer to this question, but as someone who is simply a casual trader and not a sophisticated trader, I don't really get it, so I'm going to ask anyways:

If someone (whether an individual or a TUT as per your example) wants to limit their exposure to a specific position, then why don't they just lower their basis? It seems a bit of an innefficient use of capital to devote $$$ towards a financial instrument (i.e. the various options in your example) whose purpose is not to generate positive returns -- rather, its primary purpose is to limit losses.

Just limit your exposure to an amount you are willing to lose and devote the capital that would otherwise have been spent on hedging toward other investment opportunities that your DD has indicated are screaming at you to take either a straight long or short position on.

I guess in my simpleton view of this, it seems analogous to playing roulette in Vegas and betting $1,000 on Red and then betting $600 on black because you're scared that if Black comes up that you don't want to be down the entire $1,000. Well, this is very clearly a terrible bet for several reasons and every pro gambler will tell you as much -- so why would this seemingly exact same approach to investing be deemed "smart"?

Not trying to argue with you, just trying to understand your reasoning...