6 Most common mistakes made by Option Traders

This item was filled under [ FAQ, Trading Psychology ]

To be successful in any profession, we need to learn from the mistakes of others. There isn’t enough time to make all the mistakes yourself, and specially if they are going to cost you money.

Here is list of top 6 mistakes made by option traders. Lets learn them in detail and attempt to avoid them if possible

1) Not knowing the current market conditions
2) Not understanding the building blocks of option theory
3) Forcing strategy of their choice on every opportunity
4) Not understanding the effect of time decay and volatility on option price
5) Not knowing how to choose correct option (strike price and expiry)
6) Not planning the trade completely

In following articles, I am going to discuss them in details. Feel free to post your comments for feedback.

Happy Option Trading

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2 Comments on “6 Most common mistakes made by Option Traders”

  • Jagan
    21 April, 2010, 16:55

    Great initiative Sir……..

    I would really like to see many more people in here………

  • PRATIK
    8 December, 2010, 6:55

    I WOULD REALLY LIKE U R POST WHICH IS GIVING A MORE KNOWLEDGE TO US

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