Re:Ask HN: Why be an option/futures/day trader when it is ze...
by brentr on Thursday May 15, 2008 @04:58PM
(#190946)
Liquidity is one type of risk. There exist also interest rate risk, price risk, etc.
Commissions are an expense that both sides pay to play the game. Money is not transferred from one player to another, it is transferred to outside the game.
It is true that there is a positive incentive to sell risk from the risk-manager's view. That is the whole reason the markets were initially established, both derivatives and the underlying of the derivative.
Commissions are an expense that both sides pay to play the game. Money is not transferred from one player to another, it is transferred to outside the game.
It is true that there is a positive incentive to sell risk from the risk-manager's view. That is the whole reason the markets were initially established, both derivatives and the underlying of the derivative.