I’ll admit, useless was a bit hyperbolic statement. But with stocks there is a concept called margin call which in layman terms means that if the value of your stocks (relative to the amount of what you loaned) drops too low the lender will ask you to either pay off a portion of the loan (to bring the existing loan in line with the new evaluation of the stock) or add additional collateral (to raise the total value of the collateral to be in line with the remaining loan). If neither of those things are done the lender will sell your stocks at whatever price they can get to pay off the loan (either fully or partially).
Mortgages don’t have margin calls. If the houses loses value it just loses value and the bank doesn’t care as long as you keep paying the payments.
Right, loans and stock market shenanigans are different animals. I assumed you were talking about the former given the context of “how did OpenAI find the money to pay AMD $78bn”.
In retrospect, I suppose options could have played a factor… but then again this level of ratfuckery is well beyond my understanding, so you could tell me Santa gave them the money and it’d make just as much sense.
I’ll admit, useless was a bit hyperbolic statement. But with stocks there is a concept called margin call which in layman terms means that if the value of your stocks (relative to the amount of what you loaned) drops too low the lender will ask you to either pay off a portion of the loan (to bring the existing loan in line with the new evaluation of the stock) or add additional collateral (to raise the total value of the collateral to be in line with the remaining loan). If neither of those things are done the lender will sell your stocks at whatever price they can get to pay off the loan (either fully or partially).
Mortgages don’t have margin calls. If the houses loses value it just loses value and the bank doesn’t care as long as you keep paying the payments.
Right, loans and stock market shenanigans are different animals. I assumed you were talking about the former given the context of “how did OpenAI find the money to pay AMD $78bn”.
In retrospect, I suppose options could have played a factor… but then again this level of ratfuckery is well beyond my understanding, so you could tell me Santa gave them the money and it’d make just as much sense.