Are You A “100 Percenter?”

Some option investors shoot for a goal of a 100% return on every single trade. While admirable, that’s not very realistic. Sure, you can enjoy winners of 100% return and even much more, and you can have winners of less than 100%. But as any experienced options trader can tell you, you also have to expect, with high frequency, losers of 10%, 25% 50%… all the way up to 100%.

In the world of option trading, occasional losses are inevitable. Even the most successful options traders have “clunkers.” The market is so incredibly complex and dynamic, no one can predict a trade’s outcome with 100% certainty. But no risk, no reward – right?

The beauty of options is that they allow you to manage and limit your downside risk. The important thing is to apply a “disciplined” approach to placing trades that follows your own clear-set rules, based on your personal trading objectives and risk tolerance.  When a trade fits your criteria, pull the trigger and monitor its performance. Then, evaluate the outcome of that trade and how your criteria performed. If changes in approach need to be made… make them.

While you certainly won’t get a 100% return on every trade, by continuously learning and adjusting, you can maximize returns over all your trades!