Options carry a high level of risk and are not suitable for all investors. Certain requirements must be met to trade options through Schwab. Please read the Options Disclosure Document titled “Characteristics and Risks of Standardized Options” before considering any option transaction. Supporting documentation for any claims or statistical information is available upon request.
Option traders often trade vertical spreads—like those that comprise iron condors—because they offer defined risk. However, if these positions aren’t monitored, it’s 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 options expiration risk.
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