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19 - Notional Value and Risk in Theory vs. Risk in Practice
The Trade Busters
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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