zoya Wrote:
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> so then the floor is just a what... algebraic
> construct? doesn't mean an ACTUAL cash floor?
>
> plus, think through what happens as my portfolio
> value begins to fall.
>
> say, my new portfolio value is $1.3 MM, same $1M
> floor, same 1.3 cushion:
> i end up w. (1.3 - 1) x 1.3 = .39 M in stock, and
> .91 M in cash
>
> so i now have MORE cash in the portfolio, even tho
> i have a smaller total portfolio? that makes sense
> to you?
>
> as my portfolio value declines in absolute dollar
> terms, the dollar value of my floor... increases?
This makes sense, you are getting closer to the point of having no stocks and no risk to the floor value.