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Option Selling has "Un-limited risk" isn't it ?

I do agree with the statement that option selling has "unlimited-risk". And I would not dismiss the idea of "un-limited risk" as misconception or myth. Understanding option trading itself is daunting task and particularly option selling strategies are to be employed with great care. Theoretically option selling has "un-limited risk" (not Practically)

If option selling is considered to have unlimited risk, then could it be said that the option-buying is entirely risk free? No, because when you buy a option you pay a premium for it and that is the risk you are taking to earn "un-limited profit", again it is theoretical "un-limited profit". All option buyers book their profit at one level or other.

So, in driving car there is no every-day possibility of endangering life but still possibility of injury of serious nature. Likely, NIFTY would not go down 0 value in during contract period but there is still chance of substantial loss compared to the profit one would earn by collecting premium.

Therefore we have invented this innovative strategy to overcome both Option buying and Option selling problems. Contact us to know more about it !

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