Common Mistakes When Trading Options
Hi, my name is Michael McNelis and I am an Options Strategist with Key2Options. I want to share some of the common mistakes I see options traders make so that you can accelerate your learning curve and become a profitable trader.
As with most endeavors, we learn things by making mistakes. Options trading is no different. Let’s take a look at some of the most common mistakes I see in options trading and how you can avoid them.
- Not having a plan
- Buying options with too short of a duration.
- No understanding of implied volatility
- Failing to Diversify Strategies
Not having a plan - One of the Mantras at Key2Options is plan the trade and trade the plan. Prior to entering a trade, we review 10 years of historical trades to find optimal trading parameters for the strategy you have chosen. Prior to entering into a trade, we know how we will manage the trade if the market moves higher, moves lower or stays the same level. With Key2Options, we help you make rational trades not emotional trades.