Turning Dollars into Dimes: Time-Tested Options Strategies for Losing Money

Creating great options strategies is a process of trial and error. This article is about those errors. Bad Strategy #1 — Selling Naked Options: The pinnacle of recklessness. This graph shows that if the market goes up, the trade stands to make a little bit of money. If it goes down, the trade will lose a lot of money. Selling naked puts OR calls (or tail-risk for you fancy folks) never ends well. Having a limited upside with unlimited risk is the antithesis of good trading. Here is a short list of professional traders who have cumulatively lost almost $3 billion with…...