I knew nothing about handling money. I knew nearly nothing about life, to be honest. However, the year was 1998 and I was in my mid-20s with some cash on hand.
This is hard to believe. The Traders and I were just talking about the probability/possibility of a selloff this morning over coffee. I made the case that this isn’t a bubble. (I still don’t think it’s a bubble). Then we started the day and the market fell like a rock.
First and foremost, it is a proven fact that 75% to 80% of all options held to expiration expire worthless.
Naked options are by far the riskiest investments in the commodity arena. Even outright contracts can at least have a stop loss entered on them, which will get you out automatically if the position goes against you.
Iron Butterfly trades are used for a neutral price outlook with very minimal movement expected over the duration of the trade through expiration. Compared to an Iron Condor, Iron Butterfly trades have higher defined maximum potential profits, though this…