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Option Trading : What Kinds of Mistakes Do New Traders Make?

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Register today with tastytrade for daily trade idea's, hours of content, and more : https://tastytrade.com/tt/ Tom Sosnoff and Tony Battista discuss the most common mistakes new traders make. They talk about not putting on enough occurrences, not getting enough premium, choosing the wrong strikes and more.
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Text Comments (76)
EcheChanga (1 month ago)
Your sports analogies are really helping understand options more then I have in a while thanks.
WaveFM (1 month ago)
Watching this now compared to a year ago is really refreshing and makes so much more sense.
Lee Fitzpatrick (2 months ago)
Hi guys, Big fan of your channel, I have a long question regarding options trading. I am looking to replicate a core investment portfolio with options to reduce the capital required and lowering risk. For example, SPY, TLT, GLD USO (because of option liquidity and diversification. Would debit/credit spreads (1 strike itm & 1 strike otm) be suitable or how would you approach this? I would like to hear everyones opinions and ideas. Thank you.
wishmurderwaslegal (3 months ago)
So what do you guys think about Tony Robbins Book 'unshakable' and "money master the game".
David Smith (3 months ago)
hey Tom whats the deal with really annoying side kick, then you probably waffle on so much
Mark Freeman (6 months ago)
Agreed - going big on one trade is the single biggest cause for portfolio break down.
Mark Freeman (6 months ago)
To reconcile; investing like buffett is best making less trades since it is based upon fundamentals, compounding, reducing taxes and transaction fees; trading requires frequent trades in order for the kelly critereon to come into effect.
Robin Swilley (6 months ago)
Dripping with profit skills.
cdowis (8 months ago)
Newbie mistake == open a new position but the buy or close on the new position "steps" on the same option in another spread and closes it. Instead of two separate spread you end up with one crippled, weird spread. Happened to me today
Kurtie7 (9 months ago)
Thank you very much...
Anand Sharma (9 months ago)
Extremely relevant .... seems like someone showed me a mirror!
Noah Jackson (1 year ago)
put the cherry over the apple lol!
Rebecca Cox (1 year ago)
Helpful posts for every binary options trader. I can ensure that every traders will get benefit from these. Just Search Google; "Quick Dollar Academy" this system make 2496 dollars/day.
Randy Bailin (1 year ago)
Rule 1 for beginners is to not trade in options. If you can't perform reasonably well trading the underlying stock, you certainly won't succeed trading options.
Priyam D (7 months ago)
I disagree. One is more likely to succeed at options trading than trading purely in the underlying - pure directional bets with neither edge nor any cushion for mistakes. Regards,
Tis'ur"Master'" (1 year ago)
forget trading, just give your money to the broker. All the commission paid to the broker...
chalemi (1 year ago)
OMG! What he has said up to the 8:00 minute mark, could have been said in one tenth the words. He's talked about basketball, casinos...come on. Not everyone with knowledge, has the skills to teach. This could easliy have been done in 8-10 minutes.
Rajesh Satavan (9 months ago)
Everybody is not a good teacher. But u r a great student.
Austin Reed (1 year ago)
With your expertise, what binary option broker would you recommend be the best for beginners?
Stephen Williams (1 year ago)
Why am i always at a lost in following anything you guys trying to impart. Frustrated.
Priyam D (7 months ago)
+Stephen Williams That is because Tom makes too many assumptions and approximations while making his point. He is sharp and fast so he changes all of those often and tries to improvise "on the fly" - which obviously makes the matters worse. I am from India and markets here are a bit different (lot sizes are not constant 100 shares, etc), I have no idea about baseball or for that matter betting jargon and Tom / TastyTrades have come up with some of their own ideas/concepts and hence some new jargon. This makes it extremely difficult to understand if you are going to listen to just a few episodes. You need to listen to a lot of this (and other) channel and do a lot of math that Tom skips on the fly. At times you will notice that there is error in where he lands after doing those "long jumps". Tony does a balancing act by anchoring Tom or by filling in the blanks with small questions or quips in between Tom's hops. Having said that this channel is perhaps the best to follow for option traders. They have also shared trading for newbies and if you are a little advanced trader then you may like to watch Dylan Ratigan's discussions with Tom. All in all, after 10 years of trading experience I still find something new after watching say 15-20 TastyTrade videos - which is not bad at all. I too find it difficult to fathom the same at first go. So don't get frustrated :-) Hope this helps, Regards,
Ollie Moore (10 months ago)
you are not the only one.
JR Bennett (1 year ago)
Tom, your soo right. Alot, of economist have no clue how finance really works. They have no real market experience. They rely too much on dot plots.
James Morris (1 year ago)
Experience will be the best education you ever get on the market. When you first start you will most likely lose money, however being able to learn from your mistakes is what will really determine if you're cut out for trading. Real traders don't gamble, they analyze and study the market. They create a strategy that makes money. TastyTrade, keep up the good work!
James Gray (1 year ago)
Sadly, I must agree,..it took me years and thousands of losses before finding a technique that works for me, .. but it's worth it
Corporate Algorithm (2 years ago)
This is excellent content. Thank you
the business handler (2 years ago)
Number of occurrences I like it
Henrik Rubin (2 years ago)
I was wondering if you guys can recommend a platform that you believe is the best or most useful for trading options? Thanks for your help.
Anttjuan Reid (3 months ago)
James Morris Its free to start an account.
James Morris (1 year ago)
I've seen a lot of these retail traders use ThinkOrSwim. I think it's like 2000 to start an account, but it gives detailed charts and analysis. Just a suggestion.
Viktor Vallmark (2 years ago)
+Henrik Rubin Thinkorswim is good. It's through TDA.
Barney Qt (2 years ago)
I'm using Think or swim paper trade platform and I don't know how to exit or close a trade early. I assumed that I am obligated to wait it out until expiration (because of the credit I received)? For example, I have bear call spreads and bull put spreads that made me a profit but I don't know how to close. I also made an Iron Condor on Google that fluctuates like crazy, sometimes I'm 4K profit or 12k loss in a matter of minutes. My question is that is it possible to close my iron condor if I see that it's currently at profit before expiration? Will I keep that profit if I close before expiration? The theory aspect I can swallow but it's kind of challenging once you have to incorporate that theory into practical terms and knowing the ins and outs of the platform.
Leggo My Ego (2 years ago)
+Barney Qt At these levels I'm short OTM SPX call spreads. You should know though that my account size isn't small, and this position acts as a hedge against my other long stock positions. If you have a small account size it's much better to be trading SPY, not SPX (SPX is 10x the size of SPY). Also, I don't really follow the tastytrade way of trading. I'm a value investor that uses options in two ways: 1) as a way to buy stocks I want to own at a given price (a put is essential a limit order that you get paid for, thereby reducing your basis in the stock), and 2) as a a way to hedge against a market down turn when I think the market is overvalued. When using options I always collect premium, i.e. I don't buy options.
Barney Qt (2 years ago)
+Leggo My Ego You're selling into strength on the SPX aren't you? You're using a debit spread on the SPX?
Leggo My Ego (2 years ago)
+Barney Qt Yes, I generally don't sell calls in individual stocks. I'll sell puts in stocks where I think the price is below the intrinsic value I've calculated for the company, and I'll sell call spreads in SPX when I think the market is overvalued (which I think it is right now). The SPX call spreads also act as a hedge for my long stock positions.
Barney Qt (2 years ago)
+Leggo My Ego That’s kinda scary, I wasn't even aware of that rumor.  I don’t think I would ever short individual stocks. I would stick with ETF’s and index. I also think the stock will decrease again because of the overbought state.  Thanks for the help bro.
Leggo My Ego (2 years ago)
+Barney Qt Yes, it spiked up on a rumor that Bayer is considering buying Monsanto. Though I doubt that will actually happen (government regulators are highly likely to block that merger and Bayer is foolish for even considering it at the current valuations of MON), that's part of the risk inherent in being short. There is still a 58% chance of the options expiring worthless, and only a 22% chance of you experiencing the maximum loss of $500 (minus whatever premium you received) on that trade. It's good though that you're seeing what could happen when you're selling options. A takeover bid is pretty much the worst case possible that you'll see for someone that is short calls in a stock.
Bhaskar Kaushal (2 years ago)
According to his stratergy at 17:59 one needs to sell only when then there are surplus of buyers in the market .But isn't it the fact that with the increased number of buyers chances of stock price uprisal are more .So why would a person would want to sell at that time ?
Beverly Cheney (2 years ago)
Always practice safety.
danphillyman (2 years ago)
Happy holidays!!       Were  learning too fast, what not to do, what we should've done, and what works well... before I go to day trading, Im finding out directional positions aren't too kind.... I like the straddles and strangles and like the cushion an  ITM straddle lends... just enough to sell the loser before losing more than your making on the winners... Is this accurate with you as well?What are some of your personal  favorite strategies...?
RYBATYPE (2 years ago)
10:00 - 10:15 my EXACT problem, still even after a year. One casual friday, when contracts are cheap, and they move much faster... I swear the moment I enter into what would be a winning trade, it just 180s, turns against me (like it knew I got in), and then I end up giving back parts of my week! Worst feeling ever, especially when it becomes routine (even after I tell myself repeatedly I wont do it).
Sacha10461 (2 years ago)
a little confused on a video in the university saying that if you buy options and they go past the expiration date u have to pay the difference . your buying the stock cheaper but I assume you have to sell it before it expires or else u pay the actual price of the options/stock.
run2daylite73 (2 years ago)
Sosnoff looks out for the retail trader, he's not a broker. And BTW, he's a frickin genius, so pay attention
James Holder (3 years ago)
Hi all, try to look like a pro online trading . Just Google vakapetoleum
Joey Lentz (3 years ago)
I love this guy! Great content. Great individual.
victor toombs (3 years ago)
While i am not new to the market, i have virtually no knowledge of options. Have watched several videos and am feeling overwhemed with the complexity and jargon of options. Where the heck should i begin?
Christopher Crepon (3 months ago)
There's a good torrent you can download called optionetics magnet:?xt=urn:btih:572e8ca0e068f7a8cb3ef5eb803d44b76e8ba507&dn=optionetics%20-%20options%20trading%20strategies%20-%209%2b%20hrs&tr=udp%3a%2f%2ftracker.leechers-paradise.org%3a6969&tr=udp%3a%2f%2fzer0day.ch%3a1337&tr=udp%3a%2f%2fopen.demonii.com%3a1337&tr=udp%3a%2f%2ftracker.coppersurfer.tk%3a6969&tr=udp%3a%2f%2fexodus.desync.com%3a6969
Matthew O'Gorman (6 months ago)
Before you dive into a ton of YT videos, read everything on this site. https://www.babypips.com/learn . Its a good place to start
C4rnif3X (9 months ago)
You also need a Tier 3 level margin account.. And good luck getting one. You can't take full advantage of options without one, which is writting un-covered calls/puts. Depending on the broker, they'll usually do a quick background check on your account/accounts to see if you were lying when filling out an application on a margin account from them. The odds are stacked against all of us, while big wigs get richer.
Ollie Moore (10 months ago)
i hear you. i find it way too complicated also. one suggestion is to keep it simple and stay away from it and stick to what you do understand.
teddyb33 (1 year ago)
tastytrade I see that this website has changed. where would you recommend getting free options training from now?
I.P. Freely (3 years ago)
Very kool
Hans Zarkov (4 years ago)
A broker telling people they 'need' to trade more. What a shocker.
Priyam D (7 months ago)
+ Hans Zarkov That is nothing more than Probability and Statistics. Best minds in the last century (or two) have worked on the theory. Tom being a broker (or not) is just coincidental. The theory stands on firm footing by itself. It is easier to understand the theory and math once it is thoroughly accepted/internalised that purely directional bets are poison. Ex: You can get straight 4 "Heads" in a series of coin tosses. To realise 50:50 probability you "need" to generate a "lot of incidences" which is same as generating trades for us (traders). Tom's advice comes without any strings attached and I am not a broker or Tom's advocate :P It is up to you to choose your strategy and/or broker. I am writing this for the sake of that beautiful red head in your profile photo ... miaon miaon ("Hello cutie" in English) ... Regards,
Rebecca Cox (1 year ago)
Last week, I found a *PROVEN* Automated system that make *1890 dollars/day*. Just Search Google; "Quick Dollar Academy"
I SSMDad (3 years ago)
+Hans Zarkov Other thoughts aside, more trades means higher probability of hitting on a good spread. The fewer ones you make the less chance you have. It's the same in any situation. The more jobs you apply for the higher your chances are of getting one. etc. etc.
Jesse Chen (3 years ago)
+Hans Zarkov Hm...where did you find the statistical fact on that "high frequency manual trading typically leads to big losses over time"? I couldn't find it online.
Hans Zarkov (3 years ago)
+Peter M Anyone using high frequency algorithms is not going to be using Tasty Trade, so he's not speaking to those people. High frequency manual trading typically leads to big losses over time. That's a proven fact. So your case is not rested.
Mariano Alvizouri (4 years ago)
How much is a small account? 10k? 25k? 50k? 100k?
Tony Romain (2 years ago)
+Mariano Alvizouri If you need a professional trader to handle your binary option trading and make up to 10000$ in less than 14 days, then here is your chance. contact me @ [email protected] for your successful trading.
Ian B (4 years ago)
WTH is a tasty bites account?
Coach Gumby (2 years ago)
+Ian B If you a new trader with a small account, your a tasty nugget to be eaten by the bigger guys. Just kidding, I have no idea. lol
Scott K (4 years ago)
Less than $25k. https://www.sec.gov/answers/patterndaytrader.htm
Ekatmananda Saraswati (4 years ago)
thanks for the info! also, i love that your video volume is high enough to listen to when i'm in the hot tub, with the bubbles ;)
finejustgivemeaname (4 years ago)
my strategy: 401K- keep seperate, especially if your company might go under and you didn't stay long enough to reach 100% vestment, if you are fully vested, or company goes under resulting in 100% vestment by default--roll accounts to mid-risk accounts. Take 5% of annual and put in 100% risk accounts. take 5% and allocate to stability funds.
Mike Purcell (4 years ago)
Let's do this
SHAHRUKH rana (4 years ago)
yes sir. penny stocks trading needs good patience and advice from experienced professionals. its not a joke, I heard that there is a well-known professionals team attracting lots of people who want to commence investing in stocks. have a try now here => bit.ly/18JL0Ja?=qctbmz
Shany G (5 years ago)
All is left now is to move to High Definition Videos!
plantsinspace (5 years ago)
Man, I've been trading for a couple of years now...I just found tasty trade about 2 weeks ago. How did I ever trade without this information?
Priyam D (7 months ago)
LoL ... Anyone can trade without any information. The probability of those trades winning is kind of low .... Just kidding :-) .... peace ... regards,
Lily Mats (5 years ago)
thanks for sharing. Wish the guy in the hat could flip the slides by himself
Jed Fan (5 years ago)
11:40, 11:47.
Jed Fan (5 years ago)
Incredible insights.
artvelcro (5 years ago)
Forget all that. Just tell me where to start...!!
korzym (5 years ago)
For me: being afraid of placing trades. I've figured out I should be using stop limit buy orders, as my buys are based on moving averages. On a recent show Tony interrupted and said "I just got filled" - that changed the way I thought about my fear of buying
nuri abdy (5 years ago)
Love u guys

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