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Pastimes : All Clowns Must Be Destroyed

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To: Zach E. who wrote (5868)2/1/2000 6:35:00 PM
From: pater tenebrarum  Read Replies (1) of 42523
 
yes, he's correct. what typically happens though is that once the selling of naked puts is discovered as a means to make some easy money, people will likely get carried away and under-estimate the risks involved. that's certainly what happened in '87. admittedly i'm moralizing here, but the massive mountain of derivatives is increasing systemic risk as well. unlike e.g.in a fire insurance policy, the risk inherent in naked options is system-wide.
covered calls for groceries....LOL! that's a new one...
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