Quote from makloda:
Who can blame naked option sellers here. They haven't been burned in 5 years. Free $$$
True. One thing that as traders I think we all know and recognize is that capital presevation is the key to long term success. Not losing is more important than making money. The way risk is being sold for so little across the board from hedge funds taking on default risk for historically low premiums to option sellers to subprime lenders it has that basic philosophy turned on its head. Not to mention that the risk being taken is being taken for historically very small reward. Unless it is different this time people will again come to respect risk and not be quite so cavalier about it. Until that time comes though it will all be about chasing the returns.
I know BuyLow has already posted this but it bears reposting, sometimes chasing the returns and ignoring risk is just not worth it (actually if you want to last as a trader it never is): http://www.hussmanfunds.com/wmc/wmc070212.htm