
Enduring value guardian
Total AssetsOptions trading experience

I started learning about options last week. I took a look at the options beginner's guide on Longbridge Academy and got a basic understanding of what call and put are, then jumped right in. Practice makes perfect.
In the past two weeks, I traded Tesla's call and Nvidia's call/put. Only the Tesla call expiring next week made a small profit. Overall, I lost about eighty bucks, plus high commission fees😅. Still, I managed to summarize some personal lessons.
Since I only invest a small amount in options trading, I always buy out-of-the-money (OTM) options with low prices expiring this week. Buying OTM options revealed a few issues to me.
1. As the expiration date approaches, the time value of options decays rapidly. Small fluctuations in the underlying stock's price can hardly drive up the time value of options. In other words, whether you buy calls or puts, you'll lose money, and this feeling becomes more obvious as expiration nears.
2. The closer to expiration (e.g., options expiring on Friday), the less advisable it is to buy far OTM options during Thursday or Friday trading. Only near OTM options show significant volatility for weekly expirations.
3. For options nearing expiration, try to avoid overnight positions. Take profits or cut losses on the same day. If the fundamentals don’t change much the next day (sideways movement), the time value will just keep decaying.

To me, options feel more like speculation. Since I don’t understand technical analysis, I can only rely on my gut to buy/sell. If the candlestick chart shows an upward trend, I buy calls; if it shows a downward trend, I sell. But it’s still hard to get this right.
My biggest takeaway can be summed up in eight words: take profits greedily, cut losses quickly. Unlike stocks, options won’t necessarily rebound one day. The longer you hold, waiting for a rebound, the more the time value decays toward zero as expiration approaches😅
The above is just my personal opinion, not investment advice. I welcome insights from seasoned investors.
$Tesla(TSLA.US) $NVIDIA(NVDA.US)
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