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	<title>Comments on: A Guide To Options Trading</title>
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	<link>http://www.contrarianprofits.com/articles/a-guide-to-options-trading/10172</link>
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		<title>By: Brad Castro</title>
		<link>http://www.contrarianprofits.com/articles/a-guide-to-options-trading/10172/comment-page-1#comment-8749</link>
		<dc:creator>Brad Castro</dc:creator>
		<pubDate>Wed, 17 Dec 2008 04:37:29 +0000</pubDate>
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		<description>Hey, Alex - I posted this earlier on your Seeking Alpha publication of this article, but what the heck - I&#039;ll add it here, too: 
 
Options are largely about trading risk. If you&#039;re going to make any money trading options you&#039;re going to have to assume someone else&#039;s risk (i.e. the person on the other side of the trade who&#039;s using options to reduce risk). But risk is a dial, not a switch, and you don&#039;t have to assume ALL the risk. For instance, you can dial back the risk on long calls and long puts by adding short legs and converting them to bull call spreads and bull put spreads respectively. That&#039;s more like taking the chainsaw from the 6 year old and giving it to the 16 year old. Someone may still get hurt, but the survival odds of the young lumberjack have gone up dramatically. </description>
		<content:encoded><![CDATA[<p>Hey, Alex &#8211; I posted this earlier on your Seeking Alpha publication of this article, but what the heck &#8211; I&#039;ll add it here, too: </p>
<p>Options are largely about trading risk. If you&#039;re going to make any money trading options you&#039;re going to have to assume someone else&#039;s risk (i.e. the person on the other side of the trade who&#039;s using options to reduce risk). But risk is a dial, not a switch, and you don&#039;t have to assume ALL the risk. For instance, you can dial back the risk on long calls and long puts by adding short legs and converting them to bull call spreads and bull put spreads respectively. That&#039;s more like taking the chainsaw from the 6 year old and giving it to the 16 year old. Someone may still get hurt, but the survival odds of the young lumberjack have gone up dramatically.</p>
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