The main reason why money management / position sizing is extremely important is capital preservation ….. to avoid the risk of ruin from a losing streak.
So long as you have the money / capital to trade, you would still have a chance to recover your losses. However, if your capital is gone, you would have no chance at all to recover, as you have no more money for trading.
You may have a high probability trading system that gives you 70% probability of winning. But without sound money management system, you might still get wiped out of the game...
Let’s learn and understand options trading … from scratch
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Understanding volatility is very critical in options trading. Find out more on the understanding of Implied Volatility in simple explanation...
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As discussed before in the previous post , in options trading, Implied Volatility (IV) has a huge impact on an option’s price. An option’s p...
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In stock trading, you measure stock market activity & liquidity by volume. In options trading, there are two measurements: Open Interest...
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The following are types of orders with attached conditions related to the ability of the broker to fulfill the quantity / size of the orders...
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WHAT IS VOLATILITY? Volatility is a measure of risk / uncertainty of the underlying stock price of an option. It reflects the tendency of t...
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Readers' Comment
I’ve read a few option books.
THANKS... This is probably the most comprehensive "greeks" article/book I’ve read.
Wonderful blog. …..
A wonder wealth of knowledge there. Thanks so much for your kindness in publishing it!
Thank you very much for the most concise and simplest option intro. Highly recommended.
So far, yours is the best blog/site on basic options notes in the web that I have chanced upon.
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Disclaimer
Options involve substantial risk and are not suitable for all investors.
All data & information is deemed accurate but is not warranted or guaranteed. It is your responsibility to assess the accuracy, completeness and usefulness of the content of this site. All data, information, opinion expressed, or website links in this site is for informational purpose only, and is not intended to provide any recommendation to buy or sell a security or to provide investment advice. Nor this site endorses or recommends the services of any brokerage company. This site is not responsible for any losses or damages whatsoever that may be arising from any use of the content of this site or website links in this site. You are solely responsible for your trading outcomes or for any losses, monetary or others, which may be resulting from the use of the content of this site. You must do your own due diligence before committing any investment.
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