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Long Shares

Analyzing the risk of long shares

Variations In Quantity

Normally, to maintain simplicity and consistency with option characteristics, we discuss shares in bundles of 100. Shares, however, can be purchased in any amount you choose – even if it's only 1. Below you'll find the risk profiles for differing amounts of shares so you can compare the risk and reward to the standard 100-lot (shown as a gray line).
Risk Profile: 10 Long Shares
Risk Profile: 50 Long Shares
Risk Profile: 150 Long Shares
Risk Profile: 200 Long Shares
Notice the dramatic change in P/L rates as the number of shares increases. It goes from a walking speed at 10 shares to a Lambo at 200. Smaller accounts will be more likely to trade in
less than 100 shares, or avoid them altogether. As a person with a small account, I almost never trade shares because they tend to be too capital intensive.

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