Lessons learnt
Index options;
- When trading index options it is important to stick to your size, 1 sold put option on the S&P 500 with a strike price of 3000 implicates a risk in the market of 100 x 3000 = 300.000.
Guidelines;
- Trading in index options can be exciting and lucrative. However, you need to know the characteristics and rules to be successful.
- Not over-leveraging yourself when trading options is essential.
- Index options don’t have physical delivery, so you will be confronted with cash settlements if your options expire in/out of the money.