| you lose daily depreciation. I never look to hold options more than 2 days. I buy it right before earnings day, and sell it right after. You have to follow the rules you set for yourself, no matter how painful it is or what your emotion tells you to do. You lose 20%, and you feel like you might be able to make it back holding onto them. nope, you sell it. You make 100% but you feel like if you hold onto it you might make more, doesnt matter, you still sell it.
that's how you prevent total loss.
this is not long term investment, as you said, if you hold for like a month, you might be holding worthless toilet paper, you are just hoping for a bang on earnings announcement, then sell it right after. nothing happens, you lose daily depreciation, which sometimes can go up to 20% of your original purchase price. something happen, you take the money and run as fast as possible
btw I dont buy in the market.
ps. For td ameritrade, you get 500 free trades |