RE: The death of an options trader: understanding the early exercise of an option spread.
Greetings appreciate @shortsegments.
I am very surprised that this trader has made this operation for such a significant amount without fully knowing the concept of a SPREAD.
Apparently he did not dominate the operation of this financial tool since he simply had to wait for the second half of the operation to be executed. This leads me to wonder: Perhaps this young man was using foreign funds for this transaction?
The stress that can cause operations of this nature can be increased if the funds belong to a third party. This may have limited the youngster's reasoning ability leading to this tragic decision.
In particular, I do not master the concept of Spread, I have never made this type of transaction. I only limit myself to the basic trading methods that Binance offers: Spot / Margin / Futures.
Thank you for sharing this valuable note with us.
Hi @juanmolina
Thank you for your insightful comments. He truly appears to have lacked command of the tools he was using. Your suggestion of the possibility of him using someone else’s funds definitely increases the stress of trading. 😢
My pleasure. I enjoy reading your writes.