At first glance a beginner, Option trading craftsmen are gods in the field of option position management — if the price goes wrong, they hedge the leg, adding debit, calendar and other spread, then dropping the delta, use the gamut, roll to the next strike, double the second leg, save the position, after waiting for theta to break up and, eventually, close at breakeven. Applause!!!! :)
Actually, the difficulty of this activity is slightly exaggerated, since each subsequent operation can be considered as closing the old elementary position and opening a new same elementary position, such as, car purchase, spread, etc.. — that is, elementary strategies, that every beginner understands. I.e, the point is that option trading gurus simply do not want to close a position with a loss and in every possible way delay the moment of `` shame '', trying to achieve breakeven with new moves. A beginner can simply break this multi-move into elementary steps. — close the original position at a loss, the next one too, the third in a small profit, etc., and in the tenth position you are lucky and the total deposit will return to zero.
This trend is evident not only in options, but also on underlying assets, when, for example, buying a falling knife, experienced trader trying to buy more, average ad infinitum, out two years later, finally zero. But until the deal is closed, there were no losing trades and that's cool. The newbie, not having such a skill in averaging, just not averaging, closes several times along the foot, then he has several profitable trades and after two years brings the deposit to zero. Like, the result of what the first trader has, that the second, the same, but on the other hand, the more experienced trader did not have unprofitable trades, and the newbie had a lot of them.
Yet, something similar happens in forex in the metatrader terminal, when a trader does not close a losing position, and instead opens the opposite position, ostensibly hedging it and will try to steer a losing trade. But I will leave this without comment at all due to the transparency of the situation.….
