The Option Buyer, aka Trend Follower

While many investments spend little time on estimating the likelihood of losing 100% of the amount invested, the way of investing described in this chapter focuses on exactly that, so that it can be contrasted against the likelihood of the investment returning 200% or more. This way of investing can be implemented by explicitly buying options, but also by trend following strategies, and in the dynamic decision processes of many businesses, including the implicit option of a corporate borrower that limits the liability of equity holders.