Odds simply reflect the payoff schedule of particular event at particular time. Long shots, the tracks version of risky stocks, might pay to one, or 30 for every 1 bet, an exponentially better payoff.. So assuming youre using appropriate position size, the actual risk in buying either the risky or safe stock is actually quite similar. Consider the horseracing example Whether you put down 2 bet on the sure thing, the risk is still 2. Less probable outcomes are given more attractive read lucrative odds. Whats different, of course, is the payoff schedules dictated by the odds.

Horses with good odds might pay one to two, or 1 for every 2 bet. Long shots, the tracks version of risky stocks, might pay to one, or 30 for every 1 bet, an exponentially better payoff.. Consider the horseracing example Whether you put down 2 bet on the sure thing, the risk is still 2. Whats different, of course, is the payoff schedules dictated by the odds. So assuming youre using appropriate position size, the actual risk in buying either the risky or safe stock is actually quite similar. Less probable outcomes are given more attractive read lucrative odds.
Tags: Risky Stocks