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| Discuss Writing Options at the Options within the Traderji.com - Discussion forum for Stocks Commodities & Forex; Hello all, i am new to options and i have one doubt. I see options ... |
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#1
30th January 2008, 08:33 PM
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Writing Options
Hello all,
i am new to options and i have one doubt. I see options as source of permanent income :i.e write options and recieve premium. but many are opposing.....saying avoid writing options...... it is very risky. pls post ur experience..., sugesstions, and throw light on this issue. i am quite confused...pls help me... TIA 
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#2
31st January 2008, 04:17 AM
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Re: Writing Options
if you're new to options trading do not even consider writing a naked option, you will have to pay a margin and your losses are unlimited unless you square off especially in these volatile times when there are so many problems and brokers have shut down their systems during trading hours you losses may be unprecedented.
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#6
31st January 2008, 06:48 PM
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Re: Writing Options
Quote:
Can you make money by writing options? Maybe. However, it depends "in the least" on the understanding of probability distribution. Download a "normalrandom(Mean,SD)" function for excel, place a mean of current stock/index value with an average 30 day standard deviation, and simulate the end of the month stock/index value 10,000 times odd then calculate the payoff. You will hopefully get a clearer picture.
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