That remains to be seen This is similar to how the housing bubble was engineered by Wall Street True, the mortgage originators did lend money to credit worthy home buyers They always have The mortgage backed security did them in the way they disguised the bad loans with good loans by paying the ratings agencies to put their of approval on those instruments to make them desirable investments To keep the game going the lenders offered adjustable rate mortgage loans to unqualified home buyers Monthly payments were low for the first few years Then the interest ballooned to the point these unqualified buyers were trapped with monthly payments they couldnt make so they had foreclose
Your leap put position is similar to what Michael Lewis chronicled in his book The Big Short A few guys who bothered to look determined that those mortgage bonds would eventually collapse in value so they took short positions It took a couple years for the actual collapse to happen Carvana shares could easily rise in value and the leap puts could decline in value in the next few weeks to a few months Much depends — actually all of it — depends how how many more used cars the company sells coupled with some draconian cost cutting.
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