No. It's the same thing. This is a perfect example of the traders fallacy. The stock can just as easily return to $10. It is not burdened by math. Basically what you would be saying is that mathematically it is harder for stocks to recover than it is to drop...but logically the stock doesn't know its dropped from a price level lol...it doesn't have a memory. It doesn't know how much your portfolio is up or down...all of these factors are irrelevant. The stock is just going to bounce up or down based on sentiment by .01.
The stock CAN, ofc, theoretically just as easily return to 10. But liquidy providers usually make sure it won't. Look at all the crashes of SPX and then compare it with the time it took to trade at the same level. And i'm talking crashes on daily charts not on 5min TF 10 point hiccups. So, you're saying that the ATM put @ 10 would have the same cost like ATM call @ 5 with same exp and vola?
We aren't talking about options...but they are incorrectly priced anyway. I am just pointing out that the article is wrong to imply that because your stock would have to increase by 100% to recover from a 50% loss is somehow mathematically challenged to do so. It is not.
IT IS mathematically challenged to do so because you have long gamma guys delta hedging (gamma scalping) constantly when price changes. So, when prices rise they SELL. That's an actual trade, an actual supply. Their hedging is much more tighter when the price start to rise from 5 compared to when the price starts to fall from 10. HENCE, the difference. This isn't made up sh*t, these are actual trades that affect your stock price. Where do you think your liquidity comes from ? Why are the bid/ask spreads so low?? How on earth you get this liquidity that we have on EVERY PRICE level? Exactly, from the quys that "don't know how to price options". Wanna know what happens to price when they back off from bid/ask? Check USDJPY 120minutes ago.
LOL !!!!!!!!!!!!!! Your only "stat" term is "EASILY"??????????? What happens more "EASILY",in the world of Trader Fallacy? Stock moves down 50 percent Does it EASILY go up 100%,or does it go down 50% more "EASILY"?? You have no clue,do you.... And yes,stocks do NOT have memory,which actually supports the argument why it wont "EASILY "retrace 100%.... You cant even get your arguments straight...
Explain to me how chart patterns such as channels, triangles, double tops. triple tops, support/resistance happen SO FREQUENTLY if a stock is mathematically challenged as you claim? In all these patterns price routinely returns to previous levels.