Exchange Currency

pin risk

A risk faced by option traders at the end of the exercise period of an option contract when the commodity is trading near the exercise price, or strike price. If a buyer does not exercise the option, the writer keeps the premium as profit. When pin risk occurs, the writer cannot be certain what the purchaser will do and must make a decision whether or not to cover his position by buying opposing options. Regardless of his decision, he faces a potential for loss.

Related information about pin risk:
  1. Pin risk (options) - Wikipedia, the free encyclopedia
    Pin risk occurs when the market price of the underlier of an option contract at the time of the contract's expiration is close to the option's strike price. In this ...
     
  2. Pin Risk Definition | Investopedia
    A risk that the writer of an options or futures contract faces when the price of the underlying asset closes at or very near the exercise price of the contract upon ...
     
  3. Let's Talk About Pin Risk | The Options Insider
    Jun 14, 2007 ... It's expiration week and once again our email is full of questionsabout pin risk. If you're one of the many people who have asked us about this ...
     
  4. Pin risk - Financial Dictionary - The Free Dictionary
    In options, the risk that the underlying asset of an option will close near the exercise price close to the expiration date. In this situation, the writer of the option ...
     
  5. What is option pin risk? | volcube.com
    An article explaining option pin risk. Explains pin risk and what option traders can do to manage pin risk.
     
  6. Pin Risk « OptionsHouse
    Sep 16, 2010 ... After Steve Claussen and I wrapped up our weekly webinar on expiration risks , I thought it might be helpful to highlight what we discussed and ...
     
  7. What is pin risk? definition and meaning
    Definition of pin risk: A risk faced by option traders at the end of the exercise period of an option contract when the commodity is trading near the exercise price, ...
     
  8. FX Options Analytics Vols Risk Reversals | Tradingfloor.com
    FX Options Analytics: Vols, Risk Reversals & Pin Risk. An overview of changes to at-the-money volatilities and the relative value of puts vs. calls for different ...