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Options Strategies Discussion and Support Forum
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hi Dave,
i thought the book did give techniques on how to manage the risk of selling options? they are 4 of them if i am not wrong.
or you mean there are more defined ways of managing those risks? tell us your thoughts please. :)
if you are referring to double your premium cut loss, that is a joke. A better book will be by Dave Caplan, this book is really a intro to options selling and a sales to his services.
it is 1 of the more popular method for cutting loss on naked options. If you trade more and more you will realise it is not so simple. We all know most of the time options expired worthless but it is the sometime that we have to take care of so according to the michael gross cut loss when your premium double
Example
month 1 - make 100% (options expired)
month 2 - make 100% (options expired)
month 3 - loss 200% options double
this 3 month work for nothing
any market that you trade, there is bounce to be some big move once or twice a year. If you get hit 1 time which mean you need 2 months down to recover, if you get hit 2 time it mean you need 4 month to recover.
That is not my strategy for cutting loss. but that is just me. Follow Mr Sun rolling will be better, I do a different rolling but at least Mr Sun rolling is much better than cut loss at 200% or worse 300% (which mean u need 3 month to recover)