Using Options In Risk Management by Robert J. Hamilton
ARTICLE SYNOPSIS ...Using Options In Risk Management by Robert J. Hamilton
Before options were available, the primary vehicle used for risk management was the stop-loss order. Stop-loss orders allow a certain degree of risk management, but they don't allow the user to absolutely define the amount of risk. Nowadays, put and call options can be utilized to define and implement risk management. Learn these basic risk-management strategies using options.
In the past, when futures and securities were traded before options were available, the primary vehicle
with which to manage risk was the stop-loss order. Stop-los...