The Challenge of Trading Options

It should be so easy.

You sell an option at $500 and repurchase it for a price below $100.
This is easy money. All you have to do is put the sell order in and wait for someone to buy it. Then, you put in your order to buy it and wait for someone to offer to sell it for a lower price. The sell order triggers on Thursday morning, and by Friday, you are up by at least $400 (minus trading costs, of course.) There you go. Now you know.

Of course, you say this is one example, and it is easy to show the stellar results afterward. But what if you held 100 shares of SPY at a cost basis of $500 before deciding to take your profit at $550? Furthermore, what if someone sent you a message to suggest this profit-taking strategy at the perfect time to execute this trade? That would be a neat trick.

Here is an image of the message I sent on Monday morning.

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top