What Pitfalls Have You Encountered When Trading Options?

There are common pitfalls like Lack of basic knowledge about options, Excessive leverage, Ignoring time value, and Insufficient risk management. Share your experience with tigers to help beginners!

avatarBonta
04-27

Some Sharing on usage of options

Attended tiger's event yesterday and had some discussion with some of the attendees of the event.  Decided to do some sharing on what I understand so far about options. It isn't much, but hope that it helps. 1. Do understand that options is a derivative.  As above, options is a derivative product. Understanding the base matters.  If it's a stock, take note of how the stock behaves, the earnings period, dividend period, impact to company etc.  if it's a etf, what forms the etf, how the etf moves, any dividends.  The pros and cons of options is that wins and losses are magnified. If the base assumption is wrong, options will backfire spectacularly, regardless of buy or sell options.  2. Do understand how options works. Options is not a get rich quick scheme. It'
Some Sharing on usage of options
avatarGah
04-16
Option gambling dairies: 2 I am a degenerate gambler that got bailed out by Powell, ratio was down -60% initially today and I still didn't put in a hard stop loss in the red on the decline. I only put a stop loss when it's in the green to secure profit๐Ÿคฆ.  (Played QQQ puts for context) A lot of hoping and praying was involved and I had no conviction that the market will trend down ultimately today despite the general news on the market.  I let an option go from 0.7 to 0.18 despite holding a small portfolio. Resulting in a deficit of -600$. It took Powell and last ditch gamble to turn it back to a positive 600.  Panick and anxiety is a sign of being over leveraged and gambling out of my comfort zone. One does not have to buy 10 contracts right off the bat based on ju
avatarLaiken
2024-10-26
thanks for sharing
xf
avatarpay to win
2024-10-25
ok
avatarAdelaideFox
2024-08-28

The Hidden Trap of Cash on Hand: Why YY's $4 Billion Isn't What It Seems

$JOYY Inc.(YY)$ when you dumb dumbs talk about cash on hand as if that means anything just look at YY. It had $4 billion on hand, itโ€™s more like 3.2-3.5 billion now and market cap is 1.2 billion. In China Cash on hand is either a fake number, canโ€™t be used due to currency controls, isnโ€™t invested back in the company because the company leaders China arenโ€™t smart capitalists like American CEOs/billionaires they have no idea what to do with cash, they feel no duty to buy back stock or give out dividends that are worth 3x market cap. YY could give out $90 per share right now. They wonโ€™t. They also wonโ€™t grow or invest that money. They wonโ€™t even put the money into bonds for 5% growth. The money does nothing at all.
The Hidden Trap of Cash on Hand: Why YY's $4 Billion Isn't What It Seems
avatarSandyboy
2024-09-07
I had picked up AMD PUT 134 basis 06/09 hoping for some stability. AMD was at 139 when I bought it 3 days before expiry However on expiry day the stock plummeted below my strike price. Knowing I will have to sell off to prevent assignment, I bought another put at a high price and thus averaged out te price . First put was at 1.22 and the second at 7.0, thus reduced losses As I sold at 5.30.  This strategy was new to me but I am sure experienced options players know it. Also I had another put taken at 130 but luckily that held, for the same day. That was 0 day just to reduce losses and was taken at 0.1 USD.
avatarBarcode
2024-07-29
$Tesla Motors(TSLA)$  ๐Ÿค‘๐ŸŒ๐Ÿ“ˆ๐Ÿš€ Tesla Profits: Beyond the Moon! ๐Ÿš€๐ŸŒ•๐Ÿค‘๐Ÿ’ซ Kia ora Tiger traders! ๐Ÿฅ๐Ÿ— Grand Total: Drumroll Please... ๐Ÿ—๐Ÿฅ $137.32 ๐Ÿ‡บ๐Ÿ‡ธ / NZD๐Ÿ‡ณ๐Ÿ‡ฟ$234 ๐Ÿ’ฐ๐Ÿ’ธ๐Ÿค‘ PROFIT IN ABOUT ONE HOUR! ๐Ÿ’ฐ๐Ÿ’ธ๐Ÿค‘ Hey Tiger Traders, hold onto your seats because Barcode just landed on Planet Profit with a stellar $137.32 from Tesla options! And guess what? This all happened in just about one hour at the beginning of the open market! Talk about electrifying gains! โšก๐Ÿš— Highlights: - It's a Tesla rollercoaster, and we're loving every twist and turn! - Elon Musk's expressions? Priceless! ๐Ÿ˜ฒ๐Ÿ˜… From 'Oops!' to 'We're soaring!' โ€“ he's got us on the edge of our seats. Fun Fact: Did you know? If you laid out all Barcode's Tesla profits end to end, they'd stretch from Auckland to Mars! O
avatarBarcode
2024-07-30
$NVIDIA Corp(NVDA)$ ๐Ÿš€๐Ÿ’ฅ $110: The Magic Number for NVDA! ๐Ÿ’ฅ๐Ÿš€ Kia ora Tiger traders, Fasten your seatbelts because NVDA is zooming towards my $110 target I predicted, faster than a cheetah on caffeine! ๐ŸŽฏ๐Ÿ† Weโ€™ve hit $110.34 in overnight trading, so get those wallets ready to snag some sweet NVDA action. Now, letโ€™s talk about my little friend, the $110 PUT option. I just hope it doesnโ€™t dive below $110, or itโ€™ll be like watching a slow-motion train wreck in my portfolio. ๐Ÿš‚๐Ÿ’ฅ But hey, nothing like a bit of adrenaline to spice up our trading day, right? Why $110 is the Place to Be: 1. Support Level Delight: $110 is a solid support level, making it a prime buy spot. 2. Resistance Rebound: With resistance levels above $115, thereโ€™s plenty of room for a pr
avatarwbgne
2024-08-16
$SE 20240816 80.0 CALL$ you win some, you lose some. I'll tell you what happened, I have broken the rule I've sworn I would've never broken again, namely following pump and dump internet ideas. There was no volume here, no reason to enter the trade but I did. I let this purposely go to $0 to finally learn this lesson. Hope this will help anyone out there too, this is the proof you can only trust YOUR skills and judgement. Educate yourself. I'm so upset, however, I can only learn from this as it's MY fault. Still up 20% this week despite this blow.
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