Best Practices

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Best Practices

Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.

In trading there exists a trade off between risk and reward.Limiting profitability allows for placement of trades with a higher probability of profitability.

This can lead to a higher amount of success, which is especially important in a smaller account. A few methods to increase POP include:

  • Reduce potential reward
  • Cost Basis reduction strategies
  • Take on more risk with wider strikes.

Check out today's Best Practice where Tom and Tony cover this especially important topic of risk.

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