I blew my first options trading account in 2006.
It was around 5K ...with options express ...Options Express doesn't exist anymore...they were acquired by Schwab.
So how did I blow up?
Many mistakes made and lessons learned.
I had a mentor named Carl.
I was following his short term option strategy...He has turned a 10K account to a 20K account in 6 months. I thought I could do it just following his signals.
I was up 15% at one point...Cark took the gains...but I did not...and then I learned about theta decay... one day at a time....as my options account stared dropping...slowly.
It took me probably 2-3 weeks for the account to go from 5k to $900...and then it did not even matter!
Since then, I have made all kinds of option mistakes...several mistakes multiple times.
I cover all the mistakes in Chapter 8 from my book "Options Trading for Newbies" which will be available soon.
The book is available for pre-ordering here (Preorder Pricing of $9.99 ....after launch $27 or more)
But you do not need to buy it since I am giving out this Chapter 8 for FREE.
In this chapter, I cover all the option trading mistakes that newbies and very frequently even experienced options trader make.
You may not understand and relate to some of these mistakes right away. Some you may not fully understand without experiencing them yourself while actually trading.
I cover the following mistakes in detail along with real option trading examples:
1. Buying Out of the Money Options
2. Over Leveraging with Options
3. Bid-Ask Spread & Market Orders
4. Trading around Earnings
5. Earnings or Major Announcements
6. Not understanding Volatility
7. 45 days to Expiry & Theta Decay
8. Not Tracking
9. Not using Index Options
10. Not Knowing how to Deal with Assignment
11. Legging in and out of Spreads
12. Getting all the Juice out of Sold Option Premiums!
Please let me know if you have also made similar mistakes and if you like it ...and what else should I add.
Remember with options trading first rule is to survive with your account for 6 months to a year.
We all know that 95% of the traders lose money. It is because they can not keep their account alive for even a year.
They make expensive mistakes.
And then give up thinking that options trading is gambling or they think that you can not make money with options.
Make mistakes and learn...but do not make such big mistakes that you do not have any money left to trade.
I hope this will save you from driving your options account to zero.
Since this is FREE...just enter "0" in the "Name a fair price" field.
Disclaimer: For entertainment and informational purposes only. Investing in the stock market involves a great deal of risk, and past performance is not a guarantee of future results. You could potentially lose money with any type of day trading strategy or stock market investing. You are responsible for your behavior, and this product should NOT be considered legal, tax, or personal advice. Neither the author nor publisher is a licensed broker or investment advisor. Consult a licensed financial adviser before making any investment decisions
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If you have other trading questions besides options do not hesitate to ask me. I also trade stocks and futures.
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