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 be talking about options trading golden rule number six which is no stop losses. This one’s a little bit counterintuitive and it always seems to stir up a little bit of controversy, but the results are what the results are and the numbers speak for themselves. When we go back through and we back-test hundreds and thousands of option strategies using stop losses and not using stop losses, there’s no doubt that overall, not using a stop loss on your trade ends up generating more money. Yes, I said it. Do not use stop losses as a general course of business. What you should be doing is you should be properly position-sizing like we talked about in some of the previous golden rules, making sure that you allocate a small amount to whatever ticker symbol or sector you’re trading and then let the position on to work itself out, let the probabilities work themselves out. We know that we’re going to be chal