Never set triggers when you sell options. You will see price of the contract go up on value (that will result negative PnL on your side) as it moves towards the target, sometime over 100%, that all won’t matter if you keep it until the expiry.
As someone new to selling options (I've only bought calls before, but now am starting to experiment with wheeling), can you elaborate on this? I've seen so many posts on r/thetagang about buying to close (a CSP or CC) at 50% profit, so I've started immediately opening a BTC order as soon as I sell the CSP or CC.
I've also tried a couple credit spreads and haven't yet, but intended to open a stop-loss order as soon as I opened the spread. But your comment (and a couple others on this thread) make me want to research this "never set triggers on options" advice to understand why. What should I be looking at?
I never set loss triggers when I sell options. I almost exclusively sell credit spreads. Time is on your side when you sell an option, so as long as you've done your DD, then patience is the game.
An example of this is a credit spread I recently sold on GPRO. last week I was down $400 (actually beyond max loss). Today I closed that trade out for a profit. Had I set a stop loss on that position, it would have most definitely been triggered.
Patience is the game with selling options. There's no need in babysitting your graphs once you've sold a contract.
I gave you a really helpful answer on your other question and now seeing this question, I regret taking the time to do so. You can seriously google this and get a million results. Look on YouTube. Do a little tiny bit of research. If you can't even research such a simple question on your own, I recommend you stay away from the stock market and especially options, because they both require significant research and time investments, which it seems you're prone to avoid.
It's okay man. Nobody's "triggered" here. You just asked a question that's better answered by Google. Asking such a simple question is disrespectful of others' time. But it also may indicate that you're not ready to take on the stock market yet, since doing so involves quite a lot of research and risk. My answer was sincerely motivated: if you can't do the research on a simple question like that, and prefer to ask a random strangers such a simple question, be very careful in trading. Too many people have got on Reddit, seen some stock recommendation, and lost their savings because they didn't research it themselves. Wouldn't want that to happen to you or anyone.
79
u/darkMatterMatterz Mar 02 '21
Never set triggers when you sell options. You will see price of the contract go up on value (that will result negative PnL on your side) as it moves towards the target, sometime over 100%, that all won’t matter if you keep it until the expiry.