HDFC Bank Limited
Educacional

Part 11 Trading Master Class

80
Risks in Option Trading

While options offer opportunities, they also carry risks:

Time Decay: The value of options reduces as expiry approaches.

Complexity: Requires good understanding and experience.

Unlimited Loss Potential (for Sellers): Option writers can face huge losses if the market moves against them.

Volatility Risk: Sudden market changes can make options lose value quickly.

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