 |
|||||||||
When it comes to successful trading, managing risk may be as important as stock selection. One of the most overlooked – and least understood – methods of managing risk is by using options. Randy Frederick, Schwab’s Director of Derivatives offers a three-part article offering practical risk management strategies using options.
Excerpt from Randy Frederick's article
Part 1: Covered Calls and Covered Puts
Summary: Managing risk can help you survive a bad trade to trade again another day. Part 1 describes how to use covered calls and puts to help limit risks. Every trader will have bad trades. But it is often said that the traders who thrive are not those who pick the most winners, but those who lose the least on their unsuccessful trades. By minimizing losses you can help ensure that you’ll survive to trade another day. Most equity traders use a variety of tools in an effort to limit losses, including stop orders, and technical tools such as crossovers and oscillator signals. But not as many are aware of how options strategies may be used to limit losses. To read the full article fill out the form on the right. |
| ||||||||
(0707-6591)