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You let them expire. If you have a situation where the underlying starts to go
against you Sell the deeper option and let it work for you. Then when the
underlying starts to go in your direction either buy back the short or buy the
options one strike deeper. There are a 1000 strategies for trading options in
all types of markets. Volatility is the option traders dream for that allows
him to trade. Good luck, Ira.
wong wrote:
> Hi Ira:
>
> I believe in my case it's more to do with greed and trading discipline.
>
> Before I do the trade, I have these figured out already:
>
> 1. Specific series of the call
> 2. Time to get in
> 3. Price to get in
> 4. Number of contracts to buy
> (No stop loss)
> 5. Exit conditions (oscillator indicators; profit-target; maximum stay
> period) per the stock
> itself
>
> I actually use a trading system in TS4 for buy/sell/exit signals.
>
> Thing is: Very often, I don't follow the sell signals. A lot of times, it
> works and I have huge gains. A lot of times it doesn't work and I lose -
> everything.
>
> A former broker of mine once commented: 100 people trading the same "best"
> system will likely have 100 different results, even though they have
> exactly the same buy/sell signals on exactly the same days, because
> everyone's aspiration etc etc is different.
>
> An iron-disciplined trader (in theory) would have stuck to the system's
> recommendations without deviation, I think.
>
> Regards,
>
> Wong
> ===================================================================
> At 02:37 PM 01/20/2000 -0800, Ira Tunik wrote:
> >It is not trading discipline that is lacking, it is trading. Options where
> >meant to be traded, not held in perpetuity. Did greed creep in there a
> little?
> >Ira
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