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Mike,
academically, of course, you are right. Those who were short S&P puts in
October, 1987, certainly would have been pleased to know that their losses
were "limited" because the index couldn't get any lower than zero. This kind
of limit is not what is meant in option lingo when you speak of risk being
limited.
By the same token, call profit is also limited - by market capitalization
or, to be even less realistic, by money supply M3.
And how about the number of atoms in the universe? ;-)
Enlightening exchanges such as these will occur when the market is too
quiet.
Good trading!
Michael
-----Ursprungliche Nachricht-----
Von: owner-metastock@xxxxxxxxxxxxx
[mailto:owner-metastock@xxxxxxxxxxxxx]Im Auftrag von Mike Campbell
Gesendet: Thursday, August 10, 2000 19:12
An: metastock@xxxxxxxxxxxxx
Betreff: Re: AW: What options to sell?
Michael Suesserott writes:
> Guy,
>
> Risk is limited, profit potential is unlimited, and
> there is no margin.
Just to pick a nit, with puts profit is indeed limited; the underlying
security can only go to 0.
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