I had interacted today with many option traders who apparently know nothing about the concept of Volatility. I shiver at the description of their trading strategy confined to directional option bets. Disregard or lack of understanding for Time Decay or Implied Volatility.
- Interesting post on Options
- What are the parameters to look for in deciding whether option is attractively priced ?
- Are we aware that Option is a non linear convex instrument unlike stocks or Futures ?
2 comments:
Dear Prof.
Some of the most horrific trading losses I heard of were in options trading - pure directional bet, and the guy didn't realize the expiration date was a week away.
I believe options are the greatest sirens that lure sailors into waters of financial bankruptcy.
Dear Newton,
These are some of the things I want to spread awareness in my new venture. Democratisation of financial market education is one area that is coming closer withweb 2.0.
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