Friday, March 12, 2010

20 Non-Optional laws of Options

1) Ranges kill both Puts and Calls!

2) Trends feed only one of them (Put or Call as the case may be)!
(So, trade options only in trends and never in ranges)

3) Participation determine the premium, Uncertainty kills Participation!

4) Options love the frugal & lazy trader.

5) Pluck the ripe fruit before it sours!

6) In the long run, Calls kill less traders than Puts

7) Strike price too near or too away from spot price are not the best option.

8) Options move ahead or behind the underline price, seldom along! Beware!

9) Options were designed for Swinging and Futures are designed for Scalping & Day trading.

10) Smart option strategy is not alternative to basic market understanding. It is complementary.

11) Options reward the fore-sighted and punish the short-sighted

12) The less you vibrate in options, the more you profit!

13) It hasn't expired till it has!

14) Options respect fundamentals.

15) All taken premium will be returned to the patient trader!

16) A Put or a Call is a seed. Give it time to sprout and become a plant.

17) The early bird catches the premium, too early dies of hunger!!

18) Options move in cycles, bouts of ups and downs!

19) Options hate being alone! Use Hedge!!

20) "Limited Loss, Unlimited Profit" is a trap!!!

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