Tip #5:

Stop, Do Not Pass Go

Sometimes it’s best to exit a trade that’s no longer going your way.

Setting sell stops is a personal decision: 10%-50% down is standard. Once an option has lost half its value, it’s rare to see it make a full recovery, let alone become profitable.

Options are a cash business, and you have a very limited time in which they will either boom or go bust. The more a trade turns against you, the less you have in your account that’s earning interest and available for the next trading opportunity.