Inventory of common reasons for loss of options
1. Market order is adopted.
Some options are not very liquid, the bid-ask spread is very large, and if you blindly use a market order, the cost of each order will be very high. It is recommended to use a limit order to allow market makers or other traders to match your pending orders.
2. The cost of the buyer's strategy is too high.
Equity index ETF options are okay, with strong liquidity and low transaction costs. But commodity options are a different picture, commodity options mainly rely on market makers, options are very high, in this case the buyer is very lossy, the general out-of-the-money options are 10% of the contract, that is, you were originally betting on the unilateral **, the result is 10%, which means that you need to fluctuate 10% to ensure the return on the premise of looking in the right direction, and we also know that the margin can be doubled by 10% on the ** fluctuation of 10%, It is not a good deal to buy a commodity option. Seeing that the buyer is highly leveraged, the market maker has become a victim of low leverage and high risk.
3. Limited technical level.
Options trading is in four directions, which are big up, big down, big up, big down. This requires investors to have a deeper technical analysis ability, not only to judge the future direction, but also to judge when there are fluctuations, any one of the wrong judgments will not make money. Most of the people who enter the options market are novices with little investment experience, and they just come here to try their luck, and there must be shortcomings in this regard.
4. The configuration is unreasonable.
Sophisticated options traders need to match different trading strategies and ** on the basis of correct prediction**. Option sellers are generally high-value contracts with deep out-of-the-money contracts, while option buyers are low-in-the-money options or partial out-of-the-money options. If you don't understand this, if you allocate a large number of buyers to out-of-the-money options, once you don't go in the expected direction or don't go unilaterally, the contract value of out-of-the-money options will decrease rapidly, and investors are facing the risk of losing everything.
5. Anti-monolithic. The trading time of options is generally 1 month to 3 months, many investors who used to do ** have the bad habit of resisting orders, ** in the case of not delisting, there is still a chance to unbundle the order, and a large part of the value of options comes from the value of time, as the contract expires, the value of time is accelerated to lose, if you take the option buyer of the deep virtual value, the possibility of unhedging is almost minimal.
Options learning is all here: Options Sauce!
A way to get rid of the spell of losing in options
1. Learn basic options knowledge.
Some basic knowledge, such as various basic concepts, basic strategies, etc., to ensure that you do not make low-level mistakes in the trading process.
2. Learn technical analysis methods.
You can first learn the classic traditional technical analysis theory, be familiar with common technical indicators, and understand the principles and indicator defects. Only by understanding all aspects of the road goods can we surpass most people.
3. Learning of advanced strategies.
Understand the various combination strategies, understand what strategy to use in what situation, and practice it with a simulated disc at this stage.
4. Actual combat drills.
Small ** real practice, this stage will encounter a lot of unnoticed kinds of problems, solve and master it, slowly will recognize the gap between theory and practice, and constantly revise their trading system. Options