Trading Options: Do You Break The Same Rule I Do?

The Nemesis of Trading Options

Emotions are said to be a trader’s worst enemy. Our Achilles Heel.

They take control of us and cloud our judgment. They force us to make mistakes and decisions that end up hurting us in the end.

That’s why people introduced trading systems, computer programs, and crazy complicated algorithms. – To take the emotions out of trading.

But I am still human, and so are you. So we are still liable to make mistakes based on our emotions.

In one instance I am knowingly letting my emotions get the better of me. They are making me violate one of the cardinal rules of options trading.

The rule says that you should not hold a grudge against a stock. You do not need to make your money back from the same stock you have lost money on. It is better to move onto another trade.

Online Stock Documentation

I can’t do that. I have documented every stock, etfs, and index I have traded over the past few years along with if I made money on them, or lost money.

Then, in my personal account, I look at the ones I have lost on and try to “get my money back”. I want to have all positive trades. Meaning that if I lost $87 on SRZ back in 2009, I will look to do a trade on it now, that will make me at least $88 so I can wipe off that loss.

Sounds silly if you think about it rationally. But since I am not a Vulcan I continue to do it.

Since these records also incorporate my day trading days, you can believe I have a whole bunch of stocks to get my money back from.

But you know what? It adds a little more excitement to the game. I know you are not supposed to treat a stock like an adversary, that my real adversaries are the other traders, but it is fun.

What about you? What ways, if any, do you let yor emotions get the better of you?

What trading rules do you break on purpose? Please let us know in the comments section below and be sure check out our previous blog posts for best options advisory service and awesome tips on how to do option trading for a living.

Also, please browse our options training and products section for stellar options trading course and options trading training.


  1. Paul Houston on June 18, 2012 at 4:24 pm

    Emotions are also a problem with me. If I have owned a stock that paid good dividends and capital gains allowing me to move the stop-loss up and I get stopped out in a bad market stretch, I will bend the entry rules to get the stock back

  2. Randall Vanek on June 18, 2012 at 5:07 pm

    I break the same rule in the opposite direction.

    If the regulars in a name came take me unexpectedly, I avoid it.

    Once bitten twice shy.

    If a security moves unexpectedly, I take a quick profit or loss and move on to a name I do understand.

  3. Paul on June 18, 2012 at 6:48 pm

    I wonder if I just did that today. I have some shares of kgc the gold mining stock and had a $9 Aug covered call that was getting in the money. I had lost money on the stock because of overtrading options on it when I first bought it, so instead of letting myself getting called away from the stock which would give me a $68 all time deficit, I rolled it out to November. The rollout cost me about $33 but the strike is $1 higher and the premium is .33 higher, so it will put me in the black if the stock goes a bit higher towards the 10 strike. Good management or holding on? Ultimately I believe in gold as an investment and this stock going up so I’m hoping it’s a long term good move.

  4. Phil Miller on January 1, 2015 at 10:20 am

    I do covered calls. My bad habit is knowing that a stock owes you so instead of selling and taking a loss, I buy more shares at a lower price to bring my average cost per share down. Eventually I believe that I will get my revenge. I fret over losses.

  5. James on January 5, 2015 at 4:55 pm

    The marketS go up and down because stocks go up and down. Each and every trade should be analyzed before being placed. Wise traders keep losses smal with stops. If the risk is in my favor I buy or sell the stock or option no matter if first time or one hundredth time to own the stock.

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