Part 2 Candle Stick Pattern

Risks in Option Trading

While options provide great opportunities, they are not without risk:

Leverage Risk: High leverage can magnify both gains and losses.

Time Decay: Options lose value as expiration approaches, especially if they are out-of-the-money.

Complexity: Advanced strategies can be complicated and require careful monitoring.

Liquidity Risk: Some options may have low trading volumes, making it harder to enter or exit positions at favorable prices.

Market Risk: Like all investments, options are subject to market volatility and external factors.