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TFC Commodity Trading Forum

Re: Writing Options with Limited Risk - False

I totally agree, Matthew.

People like to sell far-out-of-money options because they like "profits," albeit very small. Hundred here, hundred there, makes them feel good. But then the day comes when Black Swan occurs (see sugar yesterday) and those penny options are not worth 1000s wiping out the sellers.

Those that advocate selling such options are either ignorant of what they are writing about or evil.

Do not sell naked options! Buy them - yes. Here you know exactly what the risk is.

As a personal note, my greatest loss ever (trading for nearly 20 years) was in selling equity puts in a certain company that went bankrupt, which was NEVER supposed to according to the "expert." The impossible did happen.

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Re: Writing Options with Limited Risk - False