Futures For You by Carley Garner
USING STOP ORDERS IN COMMODITY OPTION TRADING
How can commodity option sellers protect positions from unlimited risk using stop orders?
Selling commodity options is attrac-tive because each individual endeavor is a high-probability venture. It has been said that anywhere from 70% to 90% of all options expire worthless, which immediately gives an edge to the seller of an option over the buyer of the same option. Nevertheless, despite favorable odds of success on each trade, option sellers must contend with the risk of the low-probability losers eating the proﬁts of successful trades, and worse ...