I have been bullish on the homebuilders sector since last year. We have seen a nice run, with the $SPDR S&P Homebuilders ETF(XHB)$ up over 30% since I first mentioned it last November. I have been profitting from this ETF by selling cash secured puts. However, recently there has been a selloff and my most recent trade ended up with a -5% loss. XHB Put Chart I decided to get out of the trade as it was not able reclaim a previous resistance. This is to prevent getting caught in a potential downturn which eventually happened. Exiting a cash-secured put position at a loss demonstrates a disciplined approach to risk management. Cash-secured puts offer the potential for generating income while providing downside protection, but they can turn negati
What Pitfalls Have You Encountered When Trading Options?
There are common pitfalls like Lack of basic knowledge about options, Excessive leverage, Ignoring time value, and Insufficient risk management. Share your experience with tigers to help beginners!
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