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RE: STOCKS DECIMATED: THIS NOW HAS THE POTENTIAL TO GET MUCH WORSE. By Gregory Mannarino
This is not Greg, sorry. I only know that derivatives make everything less stable and add much risk to equities that have derivatives involved. Derivatives increase risk because things can rapidly take an unexpected turn that will require immediate attention. They can act like Black Swans.
@bellakrinkle... No, derivatives don't add risk. They help you to gauge the risk. The options market tells you in what range an underlying might trade. Without an options market it is impossible to hedge your risk.
@stehaller thank you for your reply; there are many different perspectives to discuss derivatives - perhaps I misspoke because I was referring to the BIG PICTURE, meaning how derivatives make ALL Markets less stable because..... Certainly options hedge risk, but it seems you are addressing individual trades? (I knew I should have kept my mouth shut...lol) Frankly, derivatives are WAY over my head...I looked up derivatives, trying to support my thinking - HA - there are multiparagraphs of confusion! Glad you have a handle on them...
I started a series of lessons on options trading today. If you like to learn about derivatives you can start here: https://steemit.com/money/@stehaller/introduction-into-option-trading-lesson-1
@stehaller ...thank you, good fundamental information on options.