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Risk reward doesn't tell the whole picture. The question is what is the probability to realize the 1000%? You can structure any trade with 1:10 risk reward, but those trades will have very low probability of success. in order for him to make 2.5M the stock has to go down 18%. Do you know how many times AAPL went down 18% after earnings since it went public? ZERO. It went down more than 10% only 6 times. Nothing wrong to make a low probability bet which is basically a lottery ticket if you have high conviction. The problem is he is betting his whole account on this trade. Here is a bet that I'm willing to make: if he succeeds, he will continue trading, despite him swearing to stop. He will continue till all the money is gone.