Secret 89THE DRAGON THAT YOU SEE IS NOT THE DRAGON THAT WILL BURN YOU

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The theme here is be prepared for the unexpected. The Twin

Towers disaster is the perfect example of the unexpected. Here we

come back to surprise volatility. Such volatility is the friend of

the option buyer but the enemy of the option writer.

After numerous surprise bankruptcies of large corporations

in 2002, everyone is scared of the market, not knowing who to

trust. In 1987 when the Dow gapped down 500 points, a big percentage

at the time, many option writers were scared away forever,

but the Dow didn’t act like this again for a long time.

The dragon you think you see coming is probably not the

dragon that will ultimately attack you! The next dragon to burn

you probably will come from an unexpected corner of your investing

kingdom. Consequently, the scared traders in 2002 most

likely will not be looking in the right direction when the dragon

attacks.

Options give you the advantage of reducing risks and surviving

those devious dragons. Be prepared for the unexpected.

The theme here is be prepared for the unexpected. The Twin

Towers disaster is the perfect example of the unexpected. Here we

come back to surprise volatility. Such volatility is the friend of

the option buyer but the enemy of the option writer.

After numerous surprise bankruptcies of large corporations

in 2002, everyone is scared of the market, not knowing who to

trust. In 1987 when the Dow gapped down 500 points, a big percentage

at the time, many option writers were scared away forever,

but the Dow didn’t act like this again for a long time.

The dragon you think you see coming is probably not the

dragon that will ultimately attack you! The next dragon to burn

you probably will come from an unexpected corner of your investing

kingdom. Consequently, the scared traders in 2002 most

likely will not be looking in the right direction when the dragon

attacks.

Options give you the advantage of reducing risks and surviving

those devious dragons. Be prepared for the unexpected.