Taking a loss on a trade


	Taking a loss on a trade

creditspreads

9-29-2008 1:02 AM

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tags:

option trading, options

creditspreads says:

This long post is well worth the read to help in coping with a loss on a trade or more specifically when and how to take a loss.

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<div style="margin: 12px 0px; font-family: arial; color: #333333; background: #ffffff; border: solid 4px #e5e5e5; width: 100%; clear: left;"><div class="CM_CTB_Content_Wrap" style="margin: 0px; padding: 0px;background-color: #ffffff;"><div style="border-bottom: solid 1px #dcdcdc; white-space: nowrap; margin-bottom: 8px; background-color: #eeeeee ;background-image: url(http://clipmarks.com/images/source-bg.gif); background-repeat: repeat-x; height: 24px; line-height: 24px; vertical-align: middle; padding-bottom: 4px; color: #666666; font-size: 10px;" ><a href="http://clipmarks.com/clip-to-blog/" title="see clips that are hot right now"><img src="http://content.clipmarks.com/blog_embed/85625342-8848-4e81-961a-be74e7b51d19/402B2B14-3E0A-4BE1-BA35-94BDEBCFA90D/" alt="" width="19" height="19" border="0" style="vertical-align: middle; margin: 0px 4px; display: inline; border: none; float:none;" /></a>clipped from <a title="http://blog.mdwoptions.com/options_for_rookies/2008/09/q-a-taking-the-loss.html" href="http://blog.mdwoptions.com/options_for_rookies/2008/09/q-a-taking-the-loss.html" style="font-size: 11px;">blog.mdwoptions.com</a></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://blog.mdwoptions.com/options_for_rookies/2008/09/q-a-taking-the-loss.html"><H3 class="entry-header"><A href="http://blog.mdwoptions.com/options_for_rookies/2008/09/q-a-taking-the-loss.html">Q & A.  Taking The Loss</A></H3></blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://blog.mdwoptions.com/options_for_rookies/2008/09/q-a-taking-the-loss.html">You are correct.  It's difficult to make the decision.  But, it's a necessary part of your overall trading strategy.   In the spirit of full disclosure, there are people who claim that no risk management is necessary because when you buy an iron condor you already own options that limit your losses.  But, IMHO, that's insane.  It's just wrong to allow losses to get so large that they overwhelm profits. It's far better to take smaller losses, even when it means taking fewer profits.  A combination of good profits, small profits and small losses is my objective.  </blockquote></div><div style="margin: 0px 6px 6px 4px;"><table style="font-size: 11px;border-spacing: 0px;padding: 0px;" cellpadding="0" cellspacing="0" width="100%"><tr><td style="background:transparent;border-width:0px;padding:0px;">&nbsp;</td><td align="right" style="background:transparent;border-width:0px;padding:0px;width:107px" width="107"><a href="http://clipmarks.com/share/402B2B14-3E0A-4BE1-BA35-94BDEBCFA90D/blog/" title="blog or email this clip"><img src="http://content9.clipmarks.com/images/c2b-foot.png" border="0" alt="blog it" width="107" height="17" style="border-width:0px;padding:0px;margin:0px;" /></a></td></tr></table></div></div>

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