Risk Disclosure

Options are not suitable for every investor. You can lose some or all of your capital, and certain strategies carry the risk of losses greater than your initial investment. Only trade with money you can afford to lose.

1. General investment risk

The value of investments can go down as well as up, and you may get back less than you invested. Markets are affected by many factors beyond anyone’s control, including economic conditions, interest rates, volatility, and unexpected events.

2. Options-specific risks

• Loss of premium and capital. Buyers of options can lose the entire premium paid. Sellers can face losses far exceeding the premium received.
• Assignment. If you sell options, you may be assigned at any time before expiration and required to buy or sell the underlying shares, which ties up capital and can result in losses.
• Leverage. Options are leveraged instruments; small moves in the underlying can cause large percentage changes in an option’s value.
• Uncovered (naked) positions. Selling options without an offsetting position can expose you to substantial or theoretically unlimited losses.
• Liquidity and pricing. Some options are thinly traded, with wide bid-ask spreads that make it costly to enter or exit.
• Time decay and volatility. Option values erode as expiration approaches and change with implied volatility, sometimes rapidly.
• Early exercise and expiration. Rules around exercise, expiration, and settlement vary and can produce unexpected outcomes.

3. Estimates are not guarantees

Income figures, yields, “before loss” buffers, and other projections shown in Denaras are modelled estimates based on data available at the time. They assume conditions that may not hold and are not predictions or guarantees of actual results. Real outcomes depend on execution price, fees, assignment, taxes, and market movement.

4. Market data limitations

Quotes, chains, and fundamentals come from third-party providers and may be delayed, incomplete, or inaccurate. Always confirm live prices and contract details with your broker before placing any trade.

5. No advice; do your own research

Denaras does not provide personalized investment, tax, or legal advice, and nothing in the Service is a recommendation to buy or sell any security. You are solely responsible for your decisions. Consider your objectives, experience, and risk tolerance, do your own research, and consult a licensed financial professional and your broker before trading.

6. Past performance

Past premium income or performance does not guarantee future results. Historical or illustrative figures are not indicative of what you will earn.

7. Further reading

Before trading options, read the industry disclosure document Characteristics and Risks of Standardized Options, available from your broker or the Options Clearing Corporation.