Assuming Quote by George Soros
“When you sell options, you get paid for assuming risk. That can be a profitable business, but it does not mix well with the risks inherent in a leveraged portfolio.”
About This Quote
Source Interview: Financial Times, 2018
Selling options pays for risk, but mixes poorly with leveraged portfolio risk.
In simple terms: Option selling earns risk premium, yet clashes with leverage.
Key Takeaway
Separate risky strategies or hedge exposures.
Themes
finance
risk management
leverage
Mood
analytical
cautious
Type
financial
educational
When to use this quote
- hedging strategies
- risk assessment
- investment policy
Key Concepts
options pricing
portfolio construction
Questions to Reflect On
- How to balance option income with leverage?
- What safeguards mitigate combined risks?
A Different Perspective
Leverage can amplify losses despite option premiums.
![“I very often used to get backaches due to the fact that I was wrong. Whenever you are wrong you have to fight or [take] flight. When [I] make the decision, the backache goes away.” quote by George Soros](https://sms4smile.com/quotes/img-quotes/d1e/george-soros-1593_backache_i-very-often-used-to-get-backaches-due-t_38205.jpg)
![“We [at Soros Fund Management] use options and more exotic derivatives sparingly. We try to catch new trends early and in later stages we try to catch trend reversals. Therefore, we tend to stabilize rather than destabilize the market. We are not doing this as a public service. It is our style of…” quote by George Soros](https://sms4smile.com/quotes/img-quotes/f33/george-soros-1593_customer_we-at-soros-fund-management-use-options_113322.jpg)
