Options Trading: This is how people go broke! So don't do this! // Options trading tips strategies basics tutorial 101 explained for beginners for dummies, Options trading tutorial 101, how to trade options for beginners, Stock market 101, stock market basics, stock market for beginners, stock market for dummies, stock market recession, stock market tips, stock market explained, stock investing tips, stock investing 101, stock investing for beginners, stock investing for dummies, stocks for beginners, stock crash coming, stock market investing tips, stock market investing strategies, stock market investing advice, stock market bubble, stock market bubble explained welcome to looking at the markets with
David Moadel here's a tip an important
tip for options traders please don't get
greedy
greed is such a destructive force for
traders i always say that in options
trading greed and fear aren't
the two things that can bring a good
trader down and could cause you to blow
up your account and i'm going to give an
example from today today is the 9th of
december 2016 and we're going to look at
google call options and today's a friday
and so the these are the weekly options
which expired today
alright so if you had purchased a google
call option the weekly call option
expiring today at four o'clock p.m.
eastern time if you had bought the 810
call 8-10 strike price call
yesterday Thursday you would have and
and and you add a held onto it overnight
today at 1142 p.m. eastern time you
would have more than doubled your money
you would have profited a hundred and
thirty point seventy-seven percent
that's more than doubling your money
your call options would have gone up
from thirteen cents a share to thirty
cents a share and personally I don't
know about you but i recommend if you
double your money in any investment any
short-term investment especially if it's
going to expire in a few hours
take profits i recommend taking profits
if you double your money just be happy
with that doubling your money is
fantastic it really is ok so here at
eleven-forty 2pm google had gone up you
know it had gone up more than 1% google
stock and so it was up to 80 for dollars
in ten cents still out still
out-of-the-money at this point you know
it it it hadn't reached 8 10 but because
it had gone up so much in options
traders decided that there was still a
lot of hope that it would reach and
exceed 8 10 by the end of the trading
day today and that's why the call
options were worth so much more
and if you hadn't sold if you hadn't you
know sold off your call options and and
taking profits and if you had waited
until 3 45 43 46 p.m. eastern time with
only 14 minutes left in the trading day
your call option would would have gone
from a hundred and thirty percent gain
two thirty percent loss would have gone
from thirty cents a share 29 cents a
share
why is that and and the price of google
had gone up even more it went from 80
for 10 in the middle of the day 280 873
almost 8 10 by 3 46 p.m. but there were
only 14 minutes left in the trading day
and so there wasn't a whole lot of hope
left that Google would exceed 8 10 would
meet or exceed 8 10 x by the end of the
trading day in in 14 minutes and then by
359 p.m. with only a minute left in the
trading day even though Google had gone
up a little more it went up to 80 80 and
85 cents almost 8 10 but that's not good
enough with only one minute left
it was pretty hopeless the you know
hoping that Google would would meet or
exceed
810 which is this which was the strike
price so the call options had gone down
to five cents a share for a 61 and a
half percent loss from a more than
doubling your money to losing most of
your money and and possibly all of it if
you held onto it even longer so don't
get greedy please this could happen
okay now don't get me wrong if you
double your money
let's say you had doubled your money
here and then took profits and then
Google went up to 8 15 8 20 whatever 825
then you would have maybe triple or
quadruple your money and so they're
going to be times that you're gonna
double your money and then take profits
and then maybe regret it later because
you could have made even more money but
you can't think like that because you'll
drive yourself crazy
that's why it might be a good idea to
just call it a day just you know as soon
as you double your money and take
profits just you can walk away from the
computer
it's okay to do that and not even look
for the rest of the day I mean unless
you have other investments that you have
to look at but I'm just saying you might
want to walk away from that and and not
look so you don't feel the regret
because again doubling your money is
fantastic and so that's a guideline
they're all right
so I hope that is helpful to you and if
you have questions about stocks or
options or just finance in general
please send me an email my email address
is David Modell @ gmail.com at all or if
you just need help putting together a
trading or investing plan i can
certainly help you with that so send me
an email anytime
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thank you so much for watching and
listening and i'll talk to you soon