THE OPTIONS COURSE- Margin and Risk
THE OPTIONS COURSE Margin and Risk When we refer to risk management, we speak of the ability to han dle with a degree of skill the possibility of loss. Of course, when dealing with trading and the market, there are many kinds of risks. Overall, what we are trying to do is make money while at the same time managing the possibility of loss. This definition could be considered the Optionetics motto. Risk management isn’t the sexiest of terms; people don’t run out and study everything they can on the subject when they hear it. This has to do with the fact that risk management often discusses how to avoid losses, not how to make huge returns. Newsletters and stock-picking sites post claims of high returns on individual plays, but rarely state they controlled their losses with proper risk management. It just doesn’t sell. Baseball has taught us that people prefer a home run to four straight base hits, but a knowledgeable coach or trader knows that it’s the