Trading: Theory vs Practice

Option Trading: Theory vs. Practice (19:02)

Posted on July 30, 2019 - 10:58am

By Lawrence G. McMillan

This article was originally published in The Option Strategist Newsletter Volume 19, No. 2 on January 28, 2010.

Over the years, we have written many times about the problems in predicting or estimating volatility. However, it is necessary to attempt the task, because it is so crucial in determining which (option) strategies can be used.

Past performance is not necessarily indicative of future results.
Trading or investing whether on margin or otherwise carries a high level of risk, and may not be suitable for all persons. Leverage can work against you as well as for you. Before deciding to trade or invest you should carefully consider your investment objectives, level of experience, and ability to tolerate risk. The possibility exists that you could sustain a loss of some or all of your initial investment or even more than your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading and investing, and seek advice from an independent financial advisor if you have any doubts.
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