I don’t have an answer but I do share a painfully-learned lesson on options:
WHEN you look and see your options are substantially in-the-money (net 50% gain, for example) then don’t greedily hang on for MORE gains.
Instead CLOSE YOUR OPTIONS POSITIONS and lock in your profits.
I cannot tell you how many times I had 50% or 70% net paper profits and yet greed had me keep those option positions open, only to see my profit fall away as markets drifted back to center.
This week I sold almost all my option PUTS on the S&P500 as I saw they were up seventy to eighty percent net. Keep in mind I’m sure there is more money to be made on those but I sold on general principle that it doesn’t pay to be too greedy.
I’ve been happy so far with use of options, but I stick to simple straight-foward types of options: long calls and long puts. When adding up all my net gains and losses on options trades ever made, I’m vastly in the black having made now lots of money on options.
