In recent years, China's option market has been expanding, and many investors have the idea of investing in options. As we all know, many financial derivatives are risky, so is option trading risky?

is option trading risky?

Option is a high-risk investment. Many investors have seen the description that the option buyer has limited risk and unlimited potential income when they understand the option. In fact, that is only the option buyer relative to the option seller. However, from the product itself, options still have the following risks:

1. Risks faced by option buyers:

1. Zero risk of royalties. Although investors do not have the possibility of unlimited losses, they may lose all their royalties when the fluctuations are severe.

2. high premium risk: the imaginary option may have the risk of being fried near the expiration date, but when the price returns to rationality, it may cause a big loss.

2 Risk of option seller:

1. Risk of short position: option seller needs to pay margin, and when the margin is insufficient, it will be forced to close the position by the exchange.

2. Huge loss risk: As we all know, the option seller has the obligation to meet the buyer's exercise demand, no matter how unfavorable the market is to himself.

The above are the main risks in option trading, and I hope it will help you.