Hi All,
I haven't seen much on this important topic of options trading, traderji.com.
I suppose you know about the legging risk already, and in the web you get quite a lot of material. I am not interested in that. I would like to know from your real experience Because every market at all different times is different, some state of market (highly volatile) especially poses greater risk. Have you ever got into a situation where your multi-leg strategy was at risk half way through the setup? How do you usually mitigate these risks?
For the uninitiated, legging referes to the process of setting up multi-leg strategies, such as Bull Call Spread or Box Spread or Iron Condor etc by executing one leg at a time, at a humanly possible speed, without a deliberate or considerable delay. The risk is, you might have evaulated a risk reward ratio, and initiated the strategy by getting your first leg in. Before your second leg is executed, the market might have moved a fair bit (like 10-15 points, which sometime can throw a good strategy off balance) and you'd have lost control of your position. I almost had this experience during a four leg setup recently, but was fortunate that the market wasn't too choppy and came back to my price:clap:
Please do share your experience, it's greatly appreciated.
I haven't seen much on this important topic of options trading, traderji.com.
I suppose you know about the legging risk already, and in the web you get quite a lot of material. I am not interested in that. I would like to know from your real experience Because every market at all different times is different, some state of market (highly volatile) especially poses greater risk. Have you ever got into a situation where your multi-leg strategy was at risk half way through the setup? How do you usually mitigate these risks?
For the uninitiated, legging referes to the process of setting up multi-leg strategies, such as Bull Call Spread or Box Spread or Iron Condor etc by executing one leg at a time, at a humanly possible speed, without a deliberate or considerable delay. The risk is, you might have evaulated a risk reward ratio, and initiated the strategy by getting your first leg in. Before your second leg is executed, the market might have moved a fair bit (like 10-15 points, which sometime can throw a good strategy off balance) and you'd have lost control of your position. I almost had this experience during a four leg setup recently, but was fortunate that the market wasn't too choppy and came back to my price:clap:
Please do share your experience, it's greatly appreciated.