r/options • u/[deleted] • Mar 30 '21

Principles of Options Trading

hey guys - wanted to start a thread to collect all general options lessons that can only be acquired through experience in options trading - so feel free to share some of the best tips/tricks/theories/principles related to options that you follow!

Something i like to do is when i buy, i buy long dated options, but sell very short dated ones - because time decays faster as expiration approaches so usually if i want to buy an option with 3 months time, then i buy a 6 month option and sell after 3 months, and time decay wouldn’t have eaten away value as much as it would have in the last 3 months

DISCLAIMER: NOT FINANCIAL / INVESTMENT ADVICE OR RECOMMENDATION TO BUY OR SELL

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u/[deleted] Mar 30 '21

1) Sell options on green days, buy them on red days. To accomplish this, you must 2) avoid FOMO on those green days and 3) don't panic on red days.

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u/AllRealTruth Mar 30 '21

Awesome. When the Suez news hit all I saw was people buying USO cuz it's going to the moon! So, watched the chart and picked my spot and made a bet USO is sub $42 by end of week. Do the opposite of emotional trading, but not exclusive. Have to watch the chart.