30.4 Lessons for all users of Derivatives Risk must be quantified and risk limits set EXceeding risk limits not acceptable even when profits result Do not assume assume that a trader with a good track record will always be right Be diversified Scenario analysis and stress testing is important Options, Futures, and other Derivatives, 5th edition 2002 by John C. HullOptions, Futures, and Other Derivatives, 5th edition © 2002 by John C. Hull 30.4 Lessons for All Users of Derivatives • Risk must be quantified and risk limits set • Exceeding risk limits not acceptable even when profits result • Do not assume assume that a trader with a good track record will always be right • Be diversified • Scenario analysis and stress testing is important