I'm moving the whole Metacritic futures discussion here from the Super Mario Galaxy page for obvious reasons.
@Joe80, I'm sure lots of people reply to comments as they read them, and they probably read them in chronological order, so they probably didn't see your later comments yet.
I think everyone understands your suggestion, what they are saying is it doesn't make financial sense. You can't increase gains and reduce losses, just like you can't increase return while reducing risk, just like you can't make 2 + 2 = 5. That's just how the math works.
In truth, the Metacritic Futures are low risk low return (not high risk). The return is low because the possible volatility is low. What feelmyring and Laoldar really mean is that these Metacritic futures require the same amounts of capital but have lower risk and return, which is an opportunity cost tradeoff: If put my 100k in a 10% Return On Investment (ROI) asset, I can't put it in a 25% ROI asset. Of course, the 25% returns assumes more risk.
Now I don't know why this is bad. Generally you don't want all your money in very risky assets, you want your portfolio to have everything from low risk/return money market funds to high risk/return stocks, options, and futures (with the latter being a much smaller part of your portfolio).
What people are looking for is increased leverage on the Metacritic Futures. This means taking additional risk to make higher returns. This could be achieved by requiring less principal to take on the futures contracts (like how futures work in the real world), but this would probably make things more complicated as many people here don't even understand margin for shorting. This would also require daily margin calls.
Like many things on the simExchange, these are financial issues that have been solved decades if not hundreds of years ago and there's no need to "invent" a solution. Great financial minds have thought about these issues forever. It is unlikely we will come up with a better way to structure financial products or trade on an Internet message board.
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@Joe80, I'm sure lots of people reply to comments as they read them, and they probably read them in chronological order, so they probably didn't see your later comments yet.
I think everyone understands your suggestion, what they are saying is it doesn't make financial sense. You can't increase gains and reduce losses, just like you can't increase return while reducing risk, just like you can't make 2 + 2 = 5. That's just how the math works.
In truth, the Metacritic Futures are low risk low return (not high risk). The return is low because the possible volatility is low. What feelmyring and Laoldar really mean is that these Metacritic futures require the same amounts of capital but have lower risk and return, which is an opportunity cost tradeoff: If put my 100k in a 10% Return On Investment (ROI) asset, I can't put it in a 25% ROI asset. Of course, the 25% returns assumes more risk.
Now I don't know why this is bad. Generally you don't want all your money in very risky assets, you want your portfolio to have everything from low risk/return money market funds to high risk/return stocks, options, and futures (with the latter being a much smaller part of your portfolio).
What people are looking for is increased leverage on the Metacritic Futures. This means taking additional risk to make higher returns. This could be achieved by requiring less principal to take on the futures contracts (like how futures work in the real world), but this would probably make things more complicated as many people here don't even understand margin for shorting. This would also require daily margin calls.
Like many things on the simExchange, these are financial issues that have been solved decades if not hundreds of years ago and there's no need to "invent" a solution. Great financial minds have thought about these issues forever. It is unlikely we will come up with a better way to structure financial products or trade on an Internet message board.