The "daily Call" From Option Alpha: Options Trading | Stock Options | Stock Trading | Trading Online

Hey everyone. This is Kirk here again from Option Alpha and welcome back to the daily call. Today, we’re going to answer the question, “When should you exit an option trade?” I think this answer to the question is not necessarily so straightforward because when I think about exiting a trade, I think about two components. I think about exiting the trade when it’s good for the portfolio as a whole and if that is the case, then also, when it’s good for that individual trade or strategy that I’m trading. It’s both components, not one or the other because you have to start with the understanding that your portfolio is more important than one particular trade that you’re making right now. And this can be difficult for some people because they look at a trade that might be losing or that might be down, but that trade might be the trade that is holding everything else together. Maybe it’s the only bullish exposure trade that you have and if the market were to reverse, that trade is the only one that would then profit