Mistakes to avoid when writing/shorting Options

In Continuation with Previous Post  Todays post we will discuss Mistakes to avoid when writing/shorting Options
Introduction Options Shorting/Writing
Why Retail Traders "Buy Options" and Professional Trader "Write Options"

• Trading way above your Limit 

Over-positioning is the biggest mistake new option sellers make.
This is how it works: New traders sell a few options, see them decay and get excited thinking they have found the Holy Grail of making "sure shot money". Going by Intital Beginners Luck Traders proceed  selling far too many options relative to their account size and end up with either too many options for their account.This puts the whole trading account at greater risk of taking losses. Option selling works but you have to understand and respect the leverage. Remember you are supposed to be right most of the time in premium selling but at some point you will take a loss and you can’t let that loss wipe you out.
Option selling can sometimes

Continue Reading