Why Over 90% of Options Traders Lose Money
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- Опубліковано 10 чер 2024
- Learn the top 3 trade setups we are using on the desk here: tinyurl.com/599dzzxs
#optionsstrategy #optionsincome #optionstrading
00:00 - Why Over 90% of Options Traders Lose Money
01:44 - Mistake 1
06:12 - Mistake 2
10:24 - Mistake 3
16:17 - Wrapping it all together
SMB Disclosures www.smbtraining.com/blog/smb-...
Learn the top 3 trade setups we are using on the desk here: tinyurl.com/599dzzxs
Most traders lose money because of greed. They get a bit of profit and instead of waiting for a payout. They keep on trading the profit hoping to make a lot more, And in the process they end having unavoidable losses.
Trading without proper mentorship is the major reason why most people blow up their account. When trading, a lot of people tend to encounter re-occurring losses which could easily be avoided by working hand in hand with trading experts.
If option traders can understand common risk management strategies I feel can prevent catastrophic losses
People claim trading is all about losses. Would anyone have to keep posting day trading videos years upon years if it was all about losses?
I’m just getting into trading and I’m really concerned about how I’m supposed to trade without encountering repeated losses so I don’t end up blowing my account and losing money.
@KIMSMARCUS how about trading through the support of an ex pert so you can get to cut your losses shorts and your winners up. I’m new to trading too but I work with the guidance of trading ex pert cooper so I trade without the risk of blowing up my account
Thank you for the explanation of cheap options!
Great video, invaluable detail. Thank you
What a way to kick off good Friday 😊
Great video as usual. Understand option basics, never traded but preparing to start. What do you recommend?
Thank you, I now have a clear understanding of volatility crush. Excellent video.
Excellent video
This video is great!
please do more of this option videos with common mistakes!
This is one of the most educational trading channels. Very well done covering the risks of options with these different strategies. Yes, hidden risks...you gotta know the little things, they aren't supper hard to understand but you gotta understand them so you know. I find it baffling the amount of people on like WSB or wherever who post their losing trade and don't understand simple things like IV crush. Like no, idc what options strategy yoi trade, you should understand things like IV crush well before you ever put on an options trade, it shouldn't be a surprise, you shouldn't learn about IV crush the hard way.
well, did it appreciate more than original cost basis over the lifecycle, though?
Who holds till expiry??
So let's say you purchase an options contract early enough prior to earnings. Could you potentially make more by being early before earnings are priced in and sell before the actual earnings?
Good info! Thanks Seth!
These last months have not been good and I have taken to mostly covered calls. However I did buy a put for the fast food industry. $20 an hour, or more, labor cost for a fast food meal? They're doomed! So far over 100% profit is indicated. 1.95 vs. 4.60 . Hard to know when to sell. I find not being greedy, and being patient, very important!
This presentation is a finely crafted gem. concise clear and helpful. Seth,iIt would be an honor to work with you.
What are the best additions to a $500k portfolio to boost performance? ETH is Up and will do better, I believe as indicators for profits continue to improve. investors like me believe that “Santa has come early” to the markets..
I think you're better off with majority investment in bitcoin and uprising equities cos they always outperform. Alternatively speaking to a certified market strategist can help with pointers on which to acquire.
wow massive gains! my partner recently hinted on going same direction.. what did you invest in, and who is your investment advisr please, if you don’t mind me asking? in dire need of asset allocation.
ashley airagahi is the licensed advisor I use. Just research the name. You'd find necessary details to work with to set up an appointment.
Thank you for this amazing tip. I just looked the name up, wrote her explaining my financial market goals.
Umm in "Mistake #2" the stock went to $205 BEFORE expiry meaning that option would have been over $15!!! That's a pretty damn good 500% return mistake
So the solution to all three of these mistakes are:
1. For deep OTM options, you want to get the timing and entry right so you profit on micro movements and sell before theta eats through the remaining value of the options. For example, intraday bounces are where deep OTM options have value. Do not hold them to expiration.
2. For slightly OTM options, if your expected bounce did not happen within an x amount of days and your options are at risk of accelerating theta decay, roll it out to another week or two for as long as your thesis remains intact. If the thesis becames more and more unlikely, do not hold them to expiration.
3. For stocks exposed to high expected IV, consider being a premium seller rather than buyer. If your conviction is high in terms of direction, then buy a call spread where you would be protected by IV crush. Alternatively, buy farther dated options so IV crush isn't as impactful. Be prepared to cut when you are wrong.
What would be considered high IV and low IV numbers for stocks? SPX is typically hoovering around 10% but I just noticed NVDA is around 50%?
@@myselfiemirror Are you referring to IV rank or IV percentage? If IV rank, then 100% would be the highest. If just referring to IV%, then you’d need to look at the current IV relative to historical IV. Some traders use 50 day or 20 day averages to base their decision to trade it or not.
@@jodolski IV%.. Sounds good, thanks!
My answer to the option delema is that whenever buying put and call options, you need to have an edge. No edge, do not just jump in. I prefer options with at least 15 days till expiration. I personally buy in the money or no more that 2 standard deviation. ATR can help with your selection. For example , SPY, the average 14 day ATR is generally between 4.00 and 5.00 pts. So maybe it's best not to exceed that threshold. Monthly options seen to work best for me. But again, find your edge. All traders find a niche an edge that works for them. I personally like swing trading.
Kind regards,
Maverick!
@@christ7199 ATR makes a lot of sense! It helps with picking the right options. Agreed.
What is adj options??
Thank you for the video, Seth. Good stuff. Hard to believe I have been trading options since 2006 and haven't taken the time to actually utilize them the way they need to be to be consistently profitable. Got serious a week ago with the DNA program. A week with you, and I might actually get it! Some would call this a Very expensive hobby of mine. I'm getting really, really tired of losing money. Since I will Never quit trading, I better get serious.
Hi Seth , my broker only provides access to two legged options. Would i get the same result taking two separate verticals, selling an ATM call and Atm put as with the iron condor you describe?
Awesome video Seth! Just when you think it is safe to go into the water...
That last example set my hair on fire. Hard to hear these scenarios but well worth the time.
Could you also do a presentation on how the difference between the Bid and Ask price affects profit over time?
It took me a while to realize that you have to time it right and close the option before expiration to make a profit unless it is very deep in the money. Even if the call or put is out of the money, it can give you a profit if there is still extrinsic value due to being far enough from expiration. I made 50% profit today on a 180 AMD call that I closed at 179 the day before expiration.
Do you mean 2 days before expiration? Or was it expiring tomorrow, Thursday?
Markets closed Friday... my bad.
@@joeb865yep. On expiration day theta eats all the value. Unless it’s deep in the money you won’t make anything.
How are options traders performing in this market vs stock /equity traders
Almost impossible to truly know that information. Talking private trading accounts, brokers aren't just releasing that information to the public so it's hard to know how well anybody is doing.
@@Siegefya am talking in reference to their space , their prop firm in particular.
Ok
@@GLOBALBL oh, yeah.
Who holds until expiration??
broker commissions also cut into profits
Cheap options will still gain value if the stock price moves closer to the strike price, but you have to close out the trade before the expiration nears if it’s unlikely to reach that strike price.
It’s riskier than purchasing in the money or even a more realistic strike price, but can still be profitable if you’re a vigilant day trader and work with momentum.
Thank you Ronal’ for your TA 💯. I’m excited how my trading is going so far. I’m on $1m challenge right now. Already earning $35k weekly
he’s mostly on Telegrams, using the user.
@R o n a l f x 2.
May Allah bless Ronal’ for his help. I'm glad my doubts have been cleared, and i received my profit from last week's investment. Keep up the great work
I'm Glad i had positive trades with Consistent profits , less financial stress, and a satisfying lifestyle. Keep it up! Sir Ronal’
I'm glad I had profitable trades that resulted in steady profits, less worry from money, and a fulfilling lifestyle. Go on! The Sir Ronal’
11:56
But I'm not losing $$. I only sell low probability options. I don't make a lot, but it's a nice supplement to my Soc. Security.
Why don't you recommend covered calls? You don't have to buy the long put, just pick a strike price you're happy to sell your stock at, and you can't lose!
You can lose a lot if you get the direction wrong and not even covered calls would make up for it.
The downside on the covered call is if the stock falls in value. If it falls enough then any covered calls you sell are below the cost of the stock you bought. Now you can buy protective puts but this reduces your profit or you can take the risks and continue to sell covered calls just at the lower strike price. (Not saying to not do them as I do quite a bit of covered calls just letting you know where the risk this).
@@jodolski I totally disagree. Pick a strike price that you are happy to sell your stock at. It if goes up, you sell, and are happy. If it goes down, you pocket the premium and keep your shares. It's a win-win if you pick your strike price that way.
@@paulconner4614 Same comment as above. You can't lose if you're happy selling @ the strike price! Only pick prices above what you bought the stock at, BTW!
@@crystalcampisi This is great for long term investors, not for day traders.
Can we have another 2020… I didn’t have to do all this.. I just bought calls 😎
For me, greed, I'm in profit but I want more! Note I get a loss.
dang it I have ADBE calls with a delta of .06. 94% chance at dust in 10 days 😂😂
Can you guys get one of your successful traders and interview them?
They have several videos with top traders giving trading advice.
I'd have to look for those videos. I saw videos traders giving technical trading advice. I am looking for more career advancement.
Solution for me was to lose 100K in 3 days.😂 I learned though, greed is the most killing part! Need to take profit! We have plenty of days to trade.
I will be forever grateful to you, you changed my whole life and I will continue to preach on your behalf for the whole world to hear you saved me from huge financial debt with just a small investment, thank you Catherine Gauthier.
I was skeptical at first till I decided to try. Its huge returns is awesome. I can't say much
she's mostly on Telegrams, using the user name
GAUTHIER6 💯 ..that's it
Instead of making those mistakes, buy options that expire a few months out and sell whenever you feel like it. If value goes down, you have plenty of time to recover. If value goes up, let it continue to go up until you see a pullback forming. This isn't rocket science.
Sell whenever you feel like it?
So if your option drops in price
you ll sell when you feel like it even though its at a loss?
“If value goes down you have plenty of time to recover”...you state.
Well what if it doesnt recover and remember it has to not only recover but make up for all the time premium you paid up for unless you paid a sh’m load and bought deep in the money and even then..
no
its not rocket science, but its a lot harder to pull off than you state unless I misunderstood
your post altogether
@@tdiler12 Yeah, you should spend a little more time thinking about it. You're argument is valid from a day/weekly trader perspective, but it is also full of holes and I'm not going to type a 10 page report for ya.
Honestly your first statement is more full of holes because its so vague. What do you mean by sell whenever you feel like?
ARe you talking about buying or writing options? If you are suggesting selling whenever you feel like that assumes you have bought an option
and you cannot just sell whenever you feel like.Well you could if you dont care what price you sell at regardless of if its 50 % lower than the price you paid.
Talk to me Rocky .Elaborate. Let s be buddies.@@ItsMeRockyT
cheap options . . . the real teaser is on zero day ex, you see 10 cent options go to $1.50, even more . . . problem is NOT VERY OFTEN!
You guys are a joke!
Investing in Crypto market is the best financial decision anyone can make because the crypto market is much more better than anything else currently
How do you get that? In the past 3 years, the return on Bitcoin was 6%. Same 3 year return on NASDAQ stocks was 30%
@SMBcapital fyi, the email is not getting sent. I checked everything out e.g. spam etc