19 - Notional Value and Risk in Theory vs. Risk in Practice
The Trade Busters
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Credit Spreads Can Be More Risky
The risk of the stock going from ten to nine, which is a ten % drop, it's going to be higher then the risk of theStock going from tento zero. Even though the notionof value is limited and more defined, depending on the circumstance, you can have a more risky position when you evaluate what needs to actually happen for that worse case senario to come into play. But that's what i wanted ta cover for the day, just this idea that you needot uderstand how the notional value comes into play.
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