Getting Burned By Apple On Earnings
By Rocco Pendola:It's impossible to stress certain points about options enough. Just like you cannot tell your kids to look both ways before crossing the street too many times, you cannot tell people new to options to:
- Stay away from near-dated contracts.
- Stay away from out-of-the-money, particularly deep OTM contracts.
- Stay away from or do not proceed with earnings-related options trades without complete knowledge of the factors that could have an impact.
It's human nature, however, to make the types of mistakes that can hurt you on an options trade.First and foremost, many of us have been hard-wired to go the route we perceive to hold the biggest bang for the buck. We want relatively low-risk for big rewards. Related to this somewhat primal urge, we prefer to capture those rewards by spending the least of amount of money possible. In some cases we have to take the bargain because weComplete Story »