SteadyOptions is an options trading forum where you can find solutions from top options traders. Join Us!

We’ve all been there… researching options strategies and unable to find the answers we’re looking for. SteadyOptions has your solution.

Top 10 Mistakes New Option Traders Make


Option trading is not something you want to do if you just fell off the turnip truck. But when used properly, options allow investors to gain better control over the risks and rewards depending on their forecast for the stock. No matter if your forecast is bullish, bearish or neutral there’s an option strategy that can be profitable if your outlook is correct.

I came across an excellent post from Brian Overby, Senior Options Analyst at TRADEKING. He outlines the top 10 mistakes that new options traders make. Here are the highlights:

 

  • Mistake 1: Starting out by buying out-of-the-money (OTM) call options
  • Mistake 2: Using an “all-purpose” strategy in all market conditions
  • Mistake 3: Not having a definite exit plan prior to expiration
  • Mistake 4: Compromising your risk tolerance to make up for past losses by “doubling up”
  • Mistake 5: Trading illiquid options
  • Mistake 6: Waiting too long to buy back your short options
  • Mistake 7: Failing to factor earnings or dividend payment dates into your options strategy
  • Mistake 8: Not knowing what to do if you’re assigned early
  • Mistake 9: Legging into spread trades
  • Mistake 10: Failing to use index options for neutral trades

 

You can read the full article here. Highly recommended.

 

Related Articles:

Why Retail Investors Lose Money In The Stock Market

Are You Ready For The Learning Curve?

Can you double your account every six months?

How to Calculate ROI in Options Trading

Performance Reporting: The Myths and The Reality

Are You EMOTIONALLY Ready To Lose?

What Is SteadyOptions?

12 Years CAGR of 123.5%

Full Trading Plan

Complete Portfolio Approach

Real-time trade sharing: entry, exit, and adjustments

Diversified Options Strategies

Exclusive Community Forum

Steady And Consistent Gains

High Quality Education

Risk Management, Portfolio Size

Performance based on real fills

Subscribe to SteadyOptions now and experience the full power of options trading!
Subscribe

Non-directional Options Strategies

10-15 trade Ideas Per Month

Targets 5-7% Monthly Net Return

Visit our Education Center

Recent Articles

Articles


  Report Article

We want to hear from you!


There are no comments to display.



Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account. It's easy and free!


Register a new account

Sign in

Already have an account? Sign in here.


Sign In Now

Options Trading Blogs