Selling cheap uncovered short options strangles that are multiple strikes out of the money may seem like an easy way to make money, because of the supposed likelihood of the trade expiring worthless. But it is a trade with terrible risk reward and may be a lot riskier than would appear from the short strikes location.
The Trading Risk From Selling Short Uncovered Options
November 22, 2013 by Barry Lutz
Filed under: Short Options Risk
Tagged with high momentum stocks, options implied volatility, options trading risk, short options strangle, uncovered short options
Tagged with high momentum stocks, options implied volatility, options trading risk, short options strangle, uncovered short options