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Leesburg, Ohio | You would,if you knew that the market would not go against you in the position you have that your option was designed to protect.
But none of us know that , do we? That is why I use options occasionally, so that if I have exposure in either the cash commodity, a cash contract, or a straight futures position, and the market goes against that position, I can limit my loss. In those situations, if the option expires worthless, it usually means that the other side of the position made me more money than the option cost.
If one can put on a position in which the option limits losses, but leaves potential in the direction one thinks the market is likely to trend, that is a good way to manage risk, and in my opinion can justify the cost of the option. | |
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How many of you use options as a marketing tool?
