Looking for insights on this week’s market?
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Update on the market, look at interest rates and bonds.
My 2025 plan (6 stocks and ETFs I’m watching).
5 upcoming ex-dividends and 1 earnings trade I’m tracking this week.
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Now, let’s jump into one of the biggest mistakes many traders make:
Buying short-term options.
Stock options are powerful tools. They let you limit losses, protect profits, and control large stock positions for a fraction of the cost.
But…
They can also blow up your account faster than any stock trade if used recklessly.
So, why do new traders love short-term options?
Because they’re cheap. They’re tempting. And when you win, you feel like a genius.
But here’s the reality:
Most short-term options expire worthless.
That “cheap” $100 option? It’s playing right into the market makers’ hands. They’re betting against you with probabilities and time on their side.
Here’s the problem:
You need the stock to move a lot.
And it needs to move quickly.
Time decay, also known as theta decay, is relentless. It eats away at the value of your options every second.
Even if you win occasionally, the losses from all your other trades often wipe out those gains.
And when you finally hit a big winner? Fear and greed kick in. You sell too early—or hold too long. Emotional trading is a lot like gambling.
So, do I buy options? Rarely.
Instead, I prefer to sell them.
Selling puts, for example, flips the odds in your favor. Time decay works for you—not against you.
Selling puts puts time decay on your side.
I’m hosting a mini-course on January 10, 2025, to walk you through how I sell puts. This strategy is simple and effective. And it’s how I built the foundation of my trading success.
Here's a quick video explaining the mini course:
Ready to start trading the right way? Join the Mini-Course and take the first step toward confident, math-based trading. We're getting started on January 10th!
Happy trading Good Kids,
-$Maxwell
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