“This deal won’t work unless he has some skin in the game.” WTF does “skin in the game” mean, the first year associate version of myself silently wondered, before the context caught up to him. It just means “something of value at risk” and is usually used to describe why some equity offering won’t work unless the founder/financial sponsor/sleezy dirtbag “sponsor” who is very tangentially associated with the proposed transaction and stands to make a bunch of money for doing basically nothing retains a significant interest after the public offering. You can work it into many conversations where you are trying to suggest that someone needs to have a vested interest in something. For example, “If Stan wants to come over and play wii bowling, at least make sure he brings over his Robocop DVD – he needs to have some skin in the game.” In this case, the implication is that a fun night isn’t comprised solely of wii bowling, but of wii bowling and viewing the Criterion Collection version of Robocop. Stan is adding something valuable to the fun-filled night, but there is the risk that the DVD will be damaged, lost in transit, or perhaps stolen. That’s skin in the game.
How does this term apply to you, the blog reader? The relationship between blog reader and blog has always been a tenuous one. At times, the relationship is too intimate – “buy some expensive crap on Amazon, ya’ll”. At other times, it’s too distant, the reader far removed from the subject matter and having little control over the direction of the future content/pictures of hot girls. I’m here to offer a solution to this uneasy balance – I’m giving you a little skin in the game.
I try to mention the trading side of my trogger life infrequently, at best. This is mostly borne out of a superstitious fear that a horrific losing streak will occur if I speak of it much. Since I’m enduring some horrific losses, anyway – thanks, Europe, for fucking me over once again – I feel I can speak freely now. I had mentioned doing a promotional event for this site in which I would give away an iPad, resulting in a shockwave of interest the likes of which this site had never seen. (That means up to three people mentioned wanting a free iPad.) Of course, my mentioning potentially giving away an iPad somehow led to riots in Greece and computer failures in the equity markets here in the US, so I quickly backtracked and put that idea on hold.
However, the ill fortune I somehow sprang upon the world is apparently here to stay; perhaps I can reverse the process by appeasing the gods of fate somehow. This morning, I (prematurely) sold 4 Apple June $230 puts and bought 4 Apple June $220 puts for a net credit of $800, which should cover the cost of an iPad, assuming they’re back in stock in mid-June. We went to the Apple store last week, and they are pretty badass. I’ve never even owned an iPod (preferring inferior options from creative labs and the like) but I want one. So this is a two-tiered thing: If Apple stays above $230 through June expiry, then I’m giving away an iPad – but there will still be a competition element to the giveaway (still to be determined exactly how that will work).
So there’s your skin in the game, you have a tiny vested interest in what Apple stock does over the next 4.5 weeks – and, it’s not even your skin, it’s like free getting excess skin from a Biggest Loser participant. You might win a friggin iPad. (Full disclosure: there’s a far greater chance that you won’t.)
Note: I think that’s the Miranda Kerr picture that got that Aussie guy in trouble, minus the lower half of her body. So hopefully it doesn’t cause any further trouble. Friendly reminder: don’t do a google search for “skin” with safesearch off.
Additional Note: Don’t take this as a trade recommendation. For entertainment purposes only. Keep out of reach of children. (Feel free to add additional disclaimers I may have forgotten.)
Tertiary Note: Yes, I’m aware that the trade is already down $110. Don’t worry, you don’t have to buy me an iPad if I lose $3200.