Part 9 Trading Master Class

Risks in Option Trading
1. High Losses for Option Sellers

Naked call sellers face unlimited loss potential.

2. Time Decay

An option loses value as it approaches expiry.

3. Complex Pricing

Options require understanding of volatility, Greeks, and probability.

4. Liquidity Problems

Illiquid options cause slippage and wide bid-ask spreads.

5. Emotional Trading

Fast-moving markets can cause panic among new traders.