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*********** REPLY SEPARATOR ***********
On 8/3/98, at 4:27 AM, Alberto Torchio wrote:
>Kevin,
>
>> I write as many puts as my risk management allows just next below striking price put,,say 14.50,,considering there's high enough volitility.
>
>How do you manage potential losses in written options? Since potential loss is
>unlimited, do you place buy stop orders for the same options or do you place opposite
>stop in undelying futures?
Albert,,
This is based on hypothetical plan. and about the UNLIMITED potential loss,,,I would treat writing option same as naked futures positions,,,set a stop price on underlying futures and when it;s hit,,,I'm out of options position at the same time. Right now,,,I'm discussing about this way with my broker if he could excute my options order according to the underlying futures price,,,say,,if my XYZ U8 hits 14.50,,,sell my put options.
>
>Alberto Torchio
> Torino, Italy
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