Thursday, August 30, 2012

Game over

Down jones is down 100 points. What a bad day for me. I lost all my best and I am down 40 percent. So I decided I am out of the markets for now.

Big mistake was to buy too much WEEKLY options. It was just gambling. Anything can happen in the stock market. This is a lesson for me.

I should have got the 1 or 2 month options but still they are risky but not as bad as the WEEKly options.

Weekly option is down to 1.46 when I sold. I bot for 3.71. More than 70 percent loss.

Its all screwed. I will just live with what I have. Bad idea to get into OPTIONS without proper risk management. As the rule goes do not risk more than 1 percent in any trade. It should be applied for OPTIONS specifically. These are too dangerous instruments.

I am learning not to be greedy. Not to take high risks. Anything is possible in stock market. Not to take big positions in options.
Losses in Stocks was really not bad. One has to stick to a trending stock till the trend is over. That is the only way to make money. If you use options use 2 month expiration. Do not use options more than 10 percent of portfolio.

Lesson learned by losing. Hmmm too costly.

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