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Novice question: to lose that much money do you need to sell options? My understanding was that buying options was relatively safe.
by tarsinge 6y ago
Novice question: to lose that much money do you need to sell options? My understanding was that buying options was relatively safe.
- rrrrrrrrrrrryan 6y agoOptions are considered binary plays: they either expire in the money, or they expire worthless. It would be trivially simple to empty out your entire account by buying foolishly deep out-of-the-money options. (E.g. betting that GameStop shares will be worth $800 by the end of the week).
- mam2 6y agoyes but the catch is that he didn't lose the money really ... it was a UX glitch that made him suicide
- pc86 6y agoSome options (buying calls or puts, selling covered calls or cash-secured puts) are "safe" in the sense that you can't lose more than your initial investment. Some do have a larger downside that can exceed your initial investment, and some have technically infinite downside. That's why there are several levels of options, so you can be approved for the safe bets but not the ones that could cost you a million dollars on a $1,000 bet.