Understanding Risk-Adjusted Returns When Trading Options
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My articles this week on calculating a Twilio (TWLO) profit and Capital One Financial (COF) loss continue generating questions on how profit and loss calculations are applied to overall returns? So, I’ll dive a bit deeper into the topic.
It’s a well-known investment maxim that risk is correlated to reward. But, when it comes to options trading, it seems people are often making claims to consistently hitting singles while simultaneously being home run kings.
I’d like to take this opportunity to explore how returns should be calculated, whether it’s possible to achieve a high percentage win rate along with high percentage returns. And finally, which options trading strategies offer the best probability of consistent profitability.
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Category: Options Trading
