This article focus to Explain the Limitations of Options Selling, here explain Options Selling in portfolio finance perspective. Technically the structure associated with an option or Options Selling does not benefit option sellers. Once an option is sold it exposes owner to unlimited risk. Concurrently it only offers the option seller the meager profit that the premium has to offer. This unlimited exposure features led clearing firms inside futures market to call for that option sellers have enough capital to protect themselves in case the market moves in opposition to them. Option selling needs to be a straightforward endeavor. See an option you wish to sell, sell it, hang on until expiration and obtain the premium.
Explain the Limitations of Options Selling
