Futures For You by Carley Garner
OPTION SELLING: RISKS AND REMEDIES (PART 2 OF 2)
In late 2018, energy market option sellers paid a price for trading naked. How could this have been avoided?
As I discussed in this column last month, the practice of option selling is a relatively high-probability trading strategy in that it often comes with unusually high win percentages. Yet we also know that it comes with unlimited risk, and the small percentage of losing trades can wreak havoc on trading accounts. We witnessed several examples of this in the energy complex in late 2018, where at least one large hedge fund (and likely others we arenít aware of) were wiped out ...