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Gold/Mining/Energy : Big Dog's Boom Boom Room
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To: Salt'n'Peppa who wrote (141083)10/15/2010 12:23:47 PM
From: Big Dog  Read Replies (2) of 206187
 
I look at it a little different. Your total commitment is the entire price of the stock if it goes to zero, less the premium rcvd.

If you BUY an option you are definitely limiting your risk to the amount of the option purchased. Selling an option does not absolutely limit your risk (except to the extent of the full price of the underlying stock).

Just because some of the maintenance is on margin rather than in cash, doesn't reduce your risk. You are just borrowing money, which is at risk.

big
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