119: Don't Use A $6,000 Trade To "Practice" Trading Options

Show notes: http://optionalpha.com/show119

The last couple weeks of trading for many newbie investors was quite the learning experience. The market fell from all time highs quickly and then recovered nearly half of that move in a single week. Still, we got a flood of emails from people who were not well positioned for the drop in equity prices and learned the hard way why you can't practice trading options with large, one-sided trades. One unfortunately person placed a single $6,000 trade in a $10,000 account and felt the full wrath of Murphy's Law. In today's show, I want to get back to basics here for a couple minutes and re-visit some important concepts or frameworks you can use when trading that will help you navigate the next move down in stocks.