Been sitting with the Max Cost thing on TermMax Alpha and i think i talked myself into more safety than it actually gives me.
premium paid upfront. that's the max loss. clean number, feels like a ceiling on the downside. TermMax tells you that number before you even enter the position.
except max cost is about entering, not exiting.
if i want out before maturity, i'm not just eating the premium i already paid i'm selling into whatever liquidity happens to be sitting there at that moment. thin book, wide spread, and suddenly closing early costs me more than the "max" i thought i signed up for.
so the number TermMax shows me upfront is real. it's just answering a different question than the one i'm actually asking when i want to exit early.
"max cost" and "max cost if i can actually get filled" are not the same sentence.
still trying to figure out how bad that gap gets when volatility spikes and everyone's trying to close at once. anyone actually closed an Alpha position early and compared it to the quoted max cost?
@TermMax #TermMax #termmax $TMX
premium paid upfront. that's the max loss. clean number, feels like a ceiling on the downside. TermMax tells you that number before you even enter the position.
except max cost is about entering, not exiting.
if i want out before maturity, i'm not just eating the premium i already paid i'm selling into whatever liquidity happens to be sitting there at that moment. thin book, wide spread, and suddenly closing early costs me more than the "max" i thought i signed up for.
so the number TermMax shows me upfront is real. it's just answering a different question than the one i'm actually asking when i want to exit early.
"max cost" and "max cost if i can actually get filled" are not the same sentence.
still trying to figure out how bad that gap gets when volatility spikes and everyone's trying to close at once. anyone actually closed an Alpha position early and compared it to the quoted max cost?
@TermMax #TermMax #termmax $TMX