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Author: Rayvt Big gold star, 5000 posts Top Favorite Fools Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 50161  
Subject: Re: Optionshouse? Date: 7/31/2012 1:55 PM
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Biggest threat with options is its expiry.

Heh. And the biggest threat with a gun is the bullet. Which is kinda the whole point. That one thing encapsulates essentially the entire risk, and it's coming up quickly and cannot be ducked.

Biggest threat with options is its expiry.
I feel a Monty Python moment coming on....

What about the spread? (AAPL Aug 615 call 8.20/8.30)
Well, expiry and bid/ask spread.

And the price spikes? (AAPL Aug 615 call at 8.20 up 5.18 from prev close or 158%)

Well, price jumps AND spread AND expiry. But other than those what have the Romans done for us? Oops, I meant "...where is the risk?"

Options are high risk, much riskier than stocks. That's okay, it's the nature of options -- people who know about it and know how important risk management is, can do just fine. However, newbies know none of that stuff and so are going to invariably lose their shirt.
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