There is an old adage on Wall Street that says, “Never be afraid to take a profit,” but with options this adage does not apply. As an option buyer, your major goal should be to hit a home run. You can’t afford to nickel and dime your way to profits. Too many of your options will expire or lose most of their value, and your nickel and dime profits will not be able to offset those losses.
Ken Trester is editor of the popular Maximum Options program. Trester has been trading options since the first exchanges opened in 1973 with a winning streak that goes back to 1984 with money-doubling average annual profits since 1990.