Avoid Save Strategies

When a trade goes bad, many experienced option traders use repair strategies. They will add an option leg to protect a position or use a variety of other option strategies to avoid taking a loss.

There are some situations where repair strategies buy you some time for the position to move in your favor, but in many cases the trader just does not want to take a loss, and all the repair strategy does is increase his or her trading activity—a game
that you want to avoid.

One of the greatest errors made by an option trader is his inability to take a loss. This means that when your option trade goes astray, cut your losses!

Don’t use a repair strategy.