Options risk disclosure and research limitations
Options involve risk and are not suitable for every investor. This page summarizes major risks. It is not a complete list and is not a substitute for your broker's disclosures, including the Characteristics and Risks of Standardized Options document.
No guarantee
TradingSignalAI signals are ranked research output. They do not guarantee outcomes, predict prices or constitute personalized advice. You can lose money, including all of the amount invested in a long option.
Stock downside
Covered calls, buy-writes and assigned puts leave you exposed to a falling stock. Premium offsets only a portion of a decline.
Assignment
American-style options can be assigned at any time before expiration, and exercise and assignment can disrupt a planned strategy.
Defined-risk spreads
A defined maximum loss can still be several times the maximum profit. Four-leg structures multiply transaction costs.
Time decay, volatility and leverage
Long options can lose value with time or falling volatility. Leveraged exposure magnifies percentage losses.
Liquidity and execution
Wide spreads, thin open interest and fast markets can cause fills far from displayed quotes. Quotes are timestamped snapshots, not streaming prices.
Model limits
Payoff charts are scenario illustrations at stated assumptions. They exclude taxes, many fees and later events. The PMCC curve is a modeled scenario, not a fixed outcome. IV rank is a proxy.
Your responsibility
You are responsible for your decisions. Consider consulting a qualified professional about your circumstances.
Related pages
- Options Signal Methodology & Ranking LimitsSee how TradingSignalAI filters and ranks opportunities using strategy-specific inputs. Understand quote timestamps, comparison windows and model limitations.
- Options Market Data, Timestamps & CoverageUnderstand the market-data categories used by TradingSignalAI, snapshot timing, liquidity checks and after-hours research limitations. Quotes are not fills.
- Terms of Use for TradingSignalAIRead TradingSignalAI's service terms covering account use, research limitations, Premium billing, market information and responsible use of the platform.
- Options Assignment: Share Delivery & RiskUnderstand exercise, early assignment, share delivery and expiration risk. Learn why covered positions and defined-risk spreads still need active review.
Research the trade before you place it
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