Add training workflow, datasets, and runbook
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Postscript
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Option strategies cannot be unilaterally classified as aggressive or conservative.
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There are certainly many aggressive applications, the simplest being the outright pur
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chase of calls or puts. However, options can also have conservative applications, most
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notably in reducing some of the risks of common stock ownership. In addition, there
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are less polarized applications, particularly spreading techniques, that allow the
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investor to take a middle-of-the-road approach.
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Consequently, the investor himself-not options--becomes the dominant force
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in determining whether an option strategy is too risky. It is imperative that the
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investor understand what he is trying to accomplish in his portfolio before actually
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implementing an option strategy. Not only should he be cognizant of the factors that
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go into determining the initial selection of the position, but he must also have in mind
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a plan of follow-up action. If he has thought out, in advance, what action he will take
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if the underlying entity rises or falls, he will be in a position to make a more rational
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decision when and if it does indeed make a move. The investor must also determine
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if the risk of the strategy is acceptable according to his financial means and objec
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tives. If the risk is too high, the strategy is not suitable.
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Every serious investor owes it to himself to acquire an understanding of listed
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option strategies. Since various options strategies are available for a multitude of pur
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poses, alrrwst every money manager or dedicated investor will be able to use options
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in his strategies at one time or another. For a stock-oriented investor to ignore the
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potential advantages of using options would be as serious a mistake as it would be for
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a large grain company to ignore the hedging properties available in the futures mar
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ket, or as it would be for an income-oriented investor to concentrate only in utilities
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and Treasury bills while ignoring less well known, but equally compatible, alterna
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tives such as GNMAs.
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938
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