How to Use ‘Catastrophe Modeling’ to Finetune an Options Trade for Toast Inc (TOST)

While trading options can be an incredibly lucrative exercise thanks to the underlying leverage, the practice is also wildly risky. With open-market securities, the most common risk is suffering a decline in paper value. On the other end, a paper loss in derivatives may wipe out your entire principal — or much, much worse for unhinged exotic strategies. Given the dangers, it’s prudent to apply frameworks from risk-management disciplines, particularly the insurance industry. One popular and powerful method ...