10 Tips to Manage Risk in a Volatile Options Market
Randy Frederick, April 14, 2009
Free Trading Guides
-
It's a mad, mad, mad, mad market out there.
The volatility and utter unpredictability of the equity markets -- and, by extension, the options market -- can frustrate even the best and brightest traders.
If there was ever a time to be cautious with your trading strategies and to exercise the highest level of risk management possible, this is it. Of course, the great thing about the options market is that you can still make money no matter what the conditions are if you play it smart.
The rewards are there, and in some cases higher than ever before. But with high potential reward comes high risk. That's why managing risk in a volatile market is a key component to coming out on the positive side of the ledger books at the end of the day, week, month and year.
So, how do you manage risk in a volatile options market? Here are 10 tips to help you do just that.
More By This Expert
Michael Shulman
What are the five rules for constructing great short-side positions? Read on to find out.
10 Reasons to Use ETFs When Trading Options
How do investors and traders cope with a market that has fallen more than 40% in just one year and survive until greener pastures return?
The Bad News Victims of 2008 are the
New Victors of 2009
There were a lot of losing trades last year, but there were also winners for those willing to bet against conventional wisdom -- and this will be the case in 2009, too.
The 10 Dumbest Analyst Calls of 2008
This collection of calls has been easier to write than See Spot Run. My only difficulty has been restraining myself in order to not be sued, punched out or have my tires slashed.
Don't Stop 'Banking' on a Bailout
The Titanic is only just approaching the iceberg. And there aren't enough lifeboats handy for everyone who's going to need one.
