4 Speculation With Options vs. Conservative Strategies
In order to create a system in which options are used conservatively to hedge portfolio equity positions, it is first necessary to settle on definitions. Many traders describe themselves as conservative but at times execute highly speculative trades.
This problem is especially applicable to the options world. With a vast array of possible strategies, even experienced stock traders may easily fall into the trap of violating their own investment standards. Options traders need to resist temptation to veer from their self-imposed risk profile; this is not as a simple as it sounds.
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