How Do You Define Risk?

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Old Nov 4, 2016, 2:00pm   #1
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How Do You Define Risk?

We've just published a new T2W article called "How Do You Define Risk?" by Randy Frederick.

Quick Summary: Randy Frederick gives a detailed analysis of different ways in which to determine risk and includes examples of how this may be quantified.

PS. Don't forget to rate the article after you've read it and share your comments on this thread.
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Old Nov 4, 2016, 2:12pm   #2
 
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Quite a good article by "Randy Frederick".

Here in the UK I'd be embarrassed to call myself "Randy Richard" LOL
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Old Nov 9, 2016, 1:45am   #3
 
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Re: How Do You Define Risk?

certain Options are far more riskier than outright stock as the trader has 3 variables to consider..namely direction..implied volatility and time decay..risk management is but one aspect of trading..although it is by far the most important aspect..the biggest problem with options trading is confusing price with value..the sucker will always think that a cheap price is good value..whereas the actual valuation is anything but..low delta options (OTM) are not good value..but..high delta options (ITM) can also be not good value..the best value options are usually ATM options..successful options trading is far from easy..and usually requires running a diversified portfolio short options book..with access to up to date implied volatilities for all instruments..if this is achieved..then the 80% rule can indeed be very profitable for those who have the money and know how to operate a short options book
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Old Dec 18, 2016, 11:11am   #4
 
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Risk and capital

I think everyone has to define his risk level basing it on the amount of capital he has and the amount of operations he wants to do
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