Options writing - unhedged & Hedged

NG Nova Gold options cause bankrupt trader? lol

 

I don't know what that means, I leave that to the experienced options folks to conclude my rant about that optionsellers.com person.

 

blind leading the blind here!

 

Optionsellers.com were selling naked Natural Gas calls - the commodity went up a lot last Nov due to limited supplies in storage and cold weather. The big rise meant he found himself in serious trouble as he couldn't close his positions without a massive portfolio-destroying loss. Also, he was over-leveraged, as he didn't expect the NG price to rise so much, so quickly.

In commodities the symbol NG stands for Natural Gas and not Nova Gold (although the latter has the same stock symbol).

 

NG - Ahhh... Once upon a time, one of the most fun and dangerous products ever to trade.

 

Yes, agreed. Anyone who sells naked NG calls in winter has bigger cahones than most people. Or is happy to commit financial suicide. The March-April NG futures spread is called a "widow-maker" for a reason.

 

That was a joke. Obviously you didn't get it, bright one..

 

And remember, a covered call has the same risk and reward as a naked put write.