Comment on Basics on Options Shorting/Writing

Venu commented on 10 Jan 2017, 01:00 PM

Yes, as stated in the module, a short option potentially carries unlimited risks. If the markets are extremely volatile, like it was that day, no RMS system can square off all positions. The margins that are blocked as per SPAN covers for the risk on 99% of the days. There’s still that 1% of risk that every broker carries, it’s a business risk. If the account results in a debit, you’ll have to bring in additional funds to make good the losses on your position.

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