Top 3 Options Trading Mistakes You Must Avoid

00:00 - Intro to Options Mistakes
01:44 - Mistake Number 1
13:03 - Mistake Number 2
16:16 - Mistake Number 3

#optionsincome #tradingmistakes #optionsstrategy

[Loganedwards]

Despite the fact that I invest, I am frustrated by my incapacity to assess each company's performance and determine whether or not this is the best time to buy stocks. Inflation is depleting my monetary reserves. I need reliable market trajectory data at this point, but I'm not sure what to do.

[secrettrader-ogeb]

mistake #4- Thinking you're smarter than you really are, so you end up making dumb moves that cost a fortune. BUT, i promise this, you cant learn in depth info without screwing up a bunch of money sooo...🤕🤕🤕. THANKS SMB CAPITAL! for being here for us retailers. If it weren't for you guys I'd have never made it this far! All y'alls vids and advice and staying fresh has helped myself beyond words, it's helped in actual cash cash I've made! TY! Been 2 yrs now and im a break even/slightly profitable options trader. Took like 1.5 yrs to get this far plus losing a lot(not losing a ton of money tho, only about a half ton lol)

[JaymesonAnderson]

Great video, I just learned the first and second lessons the hard way this week. Was on a winning streak for about a month and a half doing iron condors, so moved to a slightly higher delta to capture more credit and increased my lot size too soon. The underlying stock blew way past my position on a positive catalyst and took out about 80% of my profits from my winning streak. On a positive note, I am glad I learned this now before ignorantly stepping into a trade with even more lots down the road and completely blowing up my account. Thanks again for another amazing lesson to help us all out.

[Jaysnipes]

I have made mistake #2. Now I'm realizing to just manage risk at all times. Trade small. I went all in a month ago or 2 & set myself back big time, after experiencing a winning streak. Now I'm realizing I have to look at my trading as one long lifetime of careful trading. Instead of racing towards a specific number that will allow me to do this full time. Patience.

[bradbenski]

I was in an August 29th trade, that did similar. The down move happened before lunch and I had to roll out to Sept 09, then to October 31 and Manage the position until Expiration. I was able to get out after 100 total trades (24 adjustments) for a 1% profit (Breakeven). The most I've ever had to fight a position.

[SeanChandlerSF]

Exactly the lesson I learned my first month. I went from 1 to 5 to 10 contracts way too quickly.

[StephenB]

Hi Seth!
Thanks for the informative video.

Maybe you could in another video discuss how traders at your firm practice the management of the trade in example number one.

Anyone who just lets the price overrun their option spread and allows the in-the-money position to just expire at market close without taking any protective action could definitely use your advice.

Setting a Delta limit to serve as a point or line in the sand where protective actions, like rolling the iron condor's wing up or down or closing it, while possibly adjusting the size of the opposite side or adding another spread to the opposite side of the closed position are valid choices in managing the trade. These options help minimize losses while possibly keeping some premium, even if it's less than the initial collection.

[markcares]

I make mistake 3 for stocks I am long on. However I correct for it by rolling forward. And collecting a little more premium. Yes it's a little more work, but I get the best of both worlds.

[albforever]

This was clear, precise and insightful!

[david_the_lawyer]

As a discretionary trader, couldn’t you roll the bad leg?

[garettb]

Please tell us at what point of a loss it is best to manage the trade

[dustinasche]

Honestly? The third example doesn't sound all that unreasonable. A 23% return in half a year is still pretty good, though I personally would have given myself a little more room for stock price to grow by selling the $210 or $215 strikes.
Also worth noting that this example is pretty cherry-picked, as this particular run-up was close to the peak for TSLA in 2023, and it has since sold back off, not quite to $195, but to the low $200s, so buying and holding, as somebody expecting the price to hit $300 might do, would have yielded little more at this point, and you'd still be in the trade instead of out of it in July.

[leonth]

Thanks Seth ! Great Video. I like the "take away" "pitfall". Unfortunately, when this happen, usually it surprises the trader because it happen so quick. Many times, the trader are neither psychologically nor operationally ready to take appropriate action to stop loss. Especially, when a trader has been winning for multiple consecutive trades and he or she believe so much that the short strike will not be breached. The mathematic calculation part is easy but the tough part is the "mind" and the "art" part of the trading.

[loumanotti]

For Scenario 1 I would have used Fib, VWAP and Ichimoku to get the "sweet spot" of the Iron Condor. I would have compared the 1 hr and 30 min to the delta to figure out delta accuracy and if it fits my strategy for profitability. This would have lead me to spread the Condor as I took profits thus not to get stuck with the stock.

For Scenario 2 I would have sold calls at said bullish target not worrying about immediate premium as call sale price was real target. The longer the stock takes to meet set call price the more premium is added to profits.

[pezzodipunto]

In options trading there is always a trade off and this is a great example of that, nice series overall, well presented, clear, sans nonsense, thank you.

[pauldarrigo]

Thanks for this. One of the view people I follow who actually seem to give good education.

[davidleonard]

While mistake number 3 is a mistake the result of making that mistake 12 times in a row is still pretty amazing. In just 5 years you would turn 100k in to 1.2m at 23 percent return every 5 months.

[garettb]

Finally they showed the downside possibility of all these strategies they teach!

[Grayl]

Why not just roll the call so you do not get assigned. Wish he would have talked about these strategies also.

[michaeltoma]

I can't tell you how much I've lost in opportunity profit with #3. I would say, 'omg, I'd love to get called if it goes to that price', only to regret it. Even 16-delta CC got me in the past. Nice job Seth!