Option Selling: How Unlimited are Its Risks?

Options are among the most interesting instruments in financial markets. It is believed that the trader takes on unlimited risks when selling an option. Head of the Derivatives Trading Department within the Masterforex-V Trading Academy successfully shattered the myth of 'unlimited risks of option selling'.

Most classical authors on option trading have no practical experience of trading. This is why often theory is far from practice, including the myth of unlimited risks of option selling. In fact, risks are not limited only if we don't limit them ourselves! Indeed, most classical writers don't say that the option you sold could be bought back... this way annulling your obligations.

Let's look at a situation with purchase of futures:

Countries of BRICS refuse dollars. What shall investors expect?

Normal 0 false false false MicrosoftInternetExplorer4 Normal 0 false false false MicrosoftInternetExplorer4 During the last summit of BRICS (Brazil, Russia, India, China, and the Republic of South Africa) the countries with dynamically developing economies that comprise the fifth announced about their decision to refuse from mutual payments in US dollars. This means that the abovementioned countries will give credits to one another in their national currencies solely. The development banks of these countries have signed an agreement about a further gradual withdrawal from loans in American dollars.

Normal 0 false false false MicrosoftInternetExplorer4 Why have the countries of BRICS initiated such action?

Some Citigroup analyst is said to spread rumors about Greek default.

Yesterday some Citigroup analyst, referring to “some market rumors”, sent someone an e-mail saying that on April 24^th Greece is going to announce a default and the necessity to restructure its debt.

Somehow the message has been made public and consequently shocked the Greek bond market, causing a share increase in the bond yield.

What will be the price on crude oil this week?

The unrest in the Middle East keeps influencing the global market of crude oil. Since the beginning of the year crude oil has gained in value 18% against the background of the political conflicts spreading over Tunis, Egypt, Syria, Libya, Bahrain and Yemen. Analysts are currently focused on the situation in Syria, saying that the tense situation in the Middle East is not improving.

Is the world really under the threat of another global economic crisis?

The World Bank, which is famous for its rather cruel and straightforward forecasts, has just made another “revelation”: the world is a few steps away from a global economic disaster.

Previously there were many similar forecasts predicting another global economic crisis. They were made by numerous economists, politicians, bankers and even journalists. In particular we reported about Charles Nenner’s prediction of market collapse and major war. Yet there is still no global crisis. However, we cannot say that it is not going to happen in the future. Probably the steps taken by the governments around the world have eventually had a temporary positive effect, which will definitely end at some point in the future. Masterforex-V Academy analysts say that the positive effect is about to be exhausted and that the world seems to be unprepared for another global depression.