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At 8:46 AM -0500 7/3/01, multitrak@xxxxxxxxxxxxxxxx wrote:
>Not necessarily....risk (probability) of ruin depends upon other factors such as your option system success rate (your advantage) and how many units that you divide your trading capital into.
>
>Of course your "exposure" is greater with futures than with options, but to imply that option trading is lower risk (ie, lower risk of ruin) than futures trading because of the premium paid is wrong. A bad option system will cause you to go broke just as quickly or quicker as a bad futures or bad stock system.
I was referring to the probability of ruin due to a rare, unexpected event since, when buying an option, the most you can lose is the premium which you know up front. I assumed you were trading a decent system...
Of course, if you use a lousy trading system, lousy money management, etc., nothing can keep you from going broke.
Bob Fulks
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