Stocks & Commodities V. 29:1 (40): Explore Your Options by Tom Gentile

Stocks & Commodities V. 29:1 (40): Explore Your Options by Tom Gentile
Item# 011GENTPDF
Availability: In Stock

Product Description

Explore Your Options by Tom Gentile


If Iím trying to manage option position risk to reduce my maximum loss exposure, is it better to tie a stop-loss to the market price of the options or the underlying stock?

Managed stops can be a good tool as they act as an extra layer of portfolio protection beyond our initial and known risk assumption if weíre dealing with a limited risk strategy. The question of exiting with a tighter managed loss based on the underlying share price versus the prevailing option market isnít as clear-cut. This is largely up to the individual trader and his or her risk acceptance, as well as the strategy being employed.

To illustrate with a simple situation that many traders can appreciate, say youíre bullish on shares technically and initiate an at-the-money long call strategy with less than 30 days until the contractís expiration. In this position type, you have clearly defined risk based on the number of contracts purchased multiplied by the purchase price.

*Note: $2.95-$5.95 Articles are in PDF format only. No hard copy of the article(s) will be delivered. During checkout, click the "Download Now" button to immediately receive your article(s) purchase. STOCKS & COMMODITIES magazine is delivered via mail. After paying for your subscription at users can view the S&C Digital Edition in the subscriber's section on

Take Control of Your Trading.
Professional Traders' Starter Kit
All these items shown below only $299.99!
  • 5-year subscription to Technical Analysis of STOCKS & COMMODITIES, The Traders' magazine. (Shipping outside the US is extra. Washington state addresses require sales tax based on your locale.)
  • 5 year access to S&C Archive
  • 5 year access to S&C Digital Edition
  • 5-year subscription to Advantage.
  • 5-year subscription to Working Money.
  • Free book selection.
  • Click Here to Order