Risk Management and Common Mistakes
Avoid common options mistakes involving oversizing, expiry risk, implied volatility, illiquid strikes, stale quotes, short-option losses and confusing submitted requests with fills.
Size by maximum loss
Do not size only by notional exposure or the attractive percentage return shown by a small premium. Start with the maximum acceptable loss.
Respect expiry and liquidity
Short-dated options can change rapidly and illiquid rows can have poor execution. Confirm live market conditions before submitting.
Verify execution
A wallet transaction is not proof of a filled CallPut position. Track the request state and actual position.
Do not ignore volatility
An underlying move can be offset by changes in implied volatility and time value.
Frequently asked questions
What does the Risk Management and Common Mistakes page cover?
It covers avoid common options mistakes involving oversizing, expiry risk, implied volatility, illiquid strikes, stale quotes, short-option losses and confusing submitted requests with fills.
Does a documentation example guarantee a live market or fill?
No. Market availability, expiries, strikes, liquidity, fees and contract state can change. Check the live application and selected network before acting.
Are CallPut stock and ETF options ownership of the referenced security?
No. The documented stock and ETF options are synthetic onchain instruments and do not grant shares, fund units, dividends, voting rights or physical delivery.