Steps to Defending an Options Trade

Options trades can profit in many ways, but they can also lose in many ways. Thankfully, options strategies, especially ones incorporating short options, can be defended relatively easily. Experienced traders Mikey and Frank start out with a basic straddle strategy, give an example of how they can go wrong, and show you how to defend it.

Find out what you can do with your losing options strategies using futures and options.

0:05 Steps to Defending an Options Trade

0:42 Say You Sold a Straddle...

2:50 If the Market Moves Against You

3:25 Converting the Option

5:12 Adding More Short Premium

5:50 Closing the Position

Sign up to start receiving free analysis on everything from stocks and bonds to commodities and foreign exchange.