Why Over 90% of Options Traders Lose Money

#optionsstrategy #optionsincome #optionstrading

00:00 - Why Over 90% of Options Traders Lose Money
01:44 - Mistake 1
06:12 - Mistake 2
10:24 - Mistake 3
16:17 - Wrapping it all together

[KhakiMma]

Most traders lose money because of greed. They get a bit of profit and instead of waiting for a payout. They keep on trading the profit hoping to make a lot more, And in the process they end having unavoidable losses.

[bill_lee]

Thank you for the explanation of cheap options!

[glennstromberg]

Thank you, I now have a clear understanding of volatility crush. Excellent video.

[jamespossible]

Great video, invaluable detail. Thank you

[adeniyierinle]

Great video as usual. Understand option basics, never traded but preparing to start. What do you recommend?

[Siegefya]

This is one of the most educational trading channels. Very well done covering the risks of options with these different strategies. Yes, hidden risks...you gotta know the little things, they aren't supper hard to understand but you gotta understand them so you know. I find it baffling the amount of people on like WSB or wherever who post their losing trade and don't understand simple things like IV crush. Like no, idc what options strategy yoi trade, you should understand things like IV crush well before you ever put on an options trade, it shouldn't be a surprise, you shouldn't learn about IV crush the hard way.

[jiaoyizhidao]

This video is great!
please do more of this option videos with common mistakes!

[shellywhite]

What are the best additions to a $500k portfolio to boost performance? ETH is Up and will do better, I believe as indicators for profits continue to improve. investors like me believe that “Santa has come early” to the markets..

[gneyman]

well, did it appreciate more than original cost basis over the lifecycle, though?
Who holds till expiry??

[ronsexton]

Good info! Thanks Seth!
These last months have not been good and I have taken to mostly covered calls. However I did buy a put for the fast food industry. $20 an hour, or more, labor cost for a fast food meal? They're doomed! So far over 100% profit is indicated. 1.95 vs. 4.60 . Hard to know when to sell. I find not being greedy, and being patient, very important!

[czapskibusinessgroup]

So let's say you purchase an options contract early enough prior to earnings. Could you potentially make more by being early before earnings are priced in and sell before the actual earnings?

[jodolski]

So the solution to all three of these mistakes are:

1. For deep OTM options, you want to get the timing and entry right so you profit on micro movements and sell before theta eats through the remaining value of the options. For example, intraday bounces are where deep OTM options have value. Do not hold them to expiration.
2. For slightly OTM options, if your expected bounce did not happen within an x amount of days and your options are at risk of accelerating theta decay, roll it out to another week or two for as long as your thesis remains intact. If the thesis becames more and more unlikely, do not hold them to expiration.
3. For stocks exposed to high expected IV, consider being a premium seller rather than buyer. If your conviction is high in terms of direction, then buy a call spread where you would be protected by IV crush. Alternatively, buy farther dated options so IV crush isn't as impactful. Be prepared to cut when you are wrong.

[HarryLewinASR]

This presentation is a finely crafted gem. concise clear and helpful. Seth, iIt would be an honor to work with you.

[joeb]

Thank you for the video, Seth. Good stuff. Hard to believe I have been trading options since 2006 and haven't taken the time to actually utilize them the way they need to be to be consistently profitable. Got serious a week ago with the DNA program. A week with you, and I might actually get it! Some would call this a Very expensive hobby of mine. I'm getting really, really tired of losing money. Since I will Never quit trading, I better get serious.

[thekmanishere]

Umm in "Mistake #2" the stock went to $205 BEFORE expiry meaning that option would have been over $15!!! That's a pretty damn good 500% return mistake

[gavnonadoroge]

broker commissions also cut into profits

[bklynboy]

It took me a while to realize that you have to time it right and close the option before expiration to make a profit unless it is very deep in the money. Even if the call or put is out of the money, it can give you a profit if there is still extrinsic value due to being far enough from expiration. I made 50% profit today on a 180 AMD call that I closed at 179 the day before expiration.

[blakeaaron]

Cheap options will still gain value if the stock price moves closer to the strike price, but you have to close out the trade before the expiration nears if it’s unlikely to reach that strike price.

It’s riskier than purchasing in the money or even a more realistic strike price, but can still be profitable if you’re a vigilant day trader and work with momentum.

[dc-wpoc]

Awesome video Seth! Just when you think it is safe to go into the water...
That last example set my hair on fire. Hard to hear these scenarios but well worth the time.
Could you also do a presentation on how the difference between the Bid and Ask price affects profit over time?

[Juanbyby-oiom]

Thank you Ronal’ for your TA 💯. I’m excited how my trading is going so far. I’m on $1m challenge right now. Already earning $35k weekly