Options involve risks and are not suitable for all investors as the special risks inherent to options trading may expose investors to potentially rapid and substantial losses. Please read Characteristics and Risks of Standardized Options ( before investing.
Options traders often trade vertical spreads—like those that comprise iron condors—because they offer defined risk. However, if these positions aren’t monitored, it can be possible to end up with a naked short option at expiration, creating a new, and potentially unlimited, risk profile. Learn how and why this happens, and what traders can do to manage that risk.
This video is part of the Options for Volatility course. Open an account to get access to the full course and more investor education:
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