It's easier for either the trader or the brokerage to liquidate a futures contract than a short option and as such is less risky.
Still more difficult to close out a short option with minimal loss.That may be true AH, but when the markets are open and have high liquidity, what stops either the trader or broker from closing out the position?
Not to belabor this, but The broker doesn't take on a loss for closing out my position. The trader takes on the risk. I assume the margin requirements act as buffer to protect the broker, and that they would apply equally to options and Futures.Still more difficult to close out a short option with minimal loss.
Believe me, ultimately, the broker is on the hook for lossesNot to belabor this, but The broker doesn't take on a loss for closing out my position. The trader takes on the risk. I assume the margin requirements act as buffer to protect the broker, and that they would apply equally to options and Futures.