/biz/ - Business & Finance

I wanna warn everyone because I saw a few too many people interested to trade them, options are very risky and strategy is ABSOLUTE key, you CAN NOT just buy a call or a put on its own, with no idea what you're buying without taking enormous risk.

Pic extremely related, immediately after a massive price movement in AMD, I expected a pullback and paid the premium for a highly volatile stock; which made it very expensive, and gave me a very short time-span. I lost a lot of money in weeks, short term high IV contracts are fucking GARBAGE.

Using options to lock in gains, and hedge against loss is a very effective strategy in crab market. Low volatility means cheap insurance. There are strategies to sell options that make it so your potentially infinite loss turn into limited loss (look up put spread, call spread). Do not get chewed up like I did, learn what IV is and learn strategy in options, DO NOT learn from experience. The lesson is too expensive.