Hello and welcome back after what I hope was a fabulous holiday break! I must say that six weeks in Hawaii was a perfect change for me. I am back, ready and anxious to trade, and share what I have learned with you.
After casually talking with new people I met on holiday, I have a better grasp of what kind of concerns and fears a new person to trading options may have. I was surprised by many of the comments I received.
Several people told me that they were too afraid to trade options because they expire. As I told them, it is a good thing that they expire as you don’t want to buy and hold as people used to do.
Yes, options do expire. When you open an options trade you choose how far out you want to own the option. For a simple call or put trade, you want close your trade 30 days prior to it’s expiration. This is one of your trading rules that you never ignore. As long as you make this practice one of your trading rules, you will be fine. I could go into great detail, but for now – just trust me on this one!
Stock options expire on the 3rd Friday of each month. If you look at an option chain, you will see that you can buy April options that will expire on the 3rd Friday of April, or you could buy June options that expire on the 3rd Friday on June.
Remember that for calls or puts, you want to close your April options no later than the March expiration.
Don’t let fear run you and take away your opportunity to make some good returns for your investment account. Quicken your learning time, lessen your loss and sign up for coaching today!