So I'm practicing with paper money atm and trading options. When I trade options, the indicated maximum loss puzzles me. For example, I might buy a put option on SPY but it is saying the maximum loss is $204,000. So do I owe the writer $204,000 if I don't fulfill the contract, or if it expires? Or is it only for people exercising the contract? This may seem like a dumb question but I'm fairly new to trading. Any response is appreciated. EDIT: Sorry i should have added that these contracts ask price is 1.44. So its saying if I bought 100 the total cost is $1440 and the maximum loss is $204,000, this is what confuses me.
Submitted April 28, 2016 at 10:57PM by jamesmit http://ift.tt/1O1aCFK
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