Regarding options, I've traded a lot of options, various strategies. When the capital was small, I basically traded options with full position for over half a year. Let me give you a rough idea of how to trade options.
1. Academic questions: you must understand what each variable in the picture means before trading. Each variable changes, what impact their changes have on option prices, and the factors affecting each variable's change.
2. The most important point about options is position management. Look at your risk tolerance; generally, it should not exceed 20%.
3. Short calls and leaps. Short calls generally refer to those within three months. Before buying a short call, ask yourself if you can accept it expiring worthless. Before buying leaps, ask if you can accept a -50% loss. If you can't, then the position is too large.
4. What scenarios do short calls and leaps correspond to? Short calls don't require trend judgment. Even if you're bullish long-term, don't buy short calls. Short calls are only used for bottom reversals. If you don't have the skill to judge a bottom reversal, buying short calls will be very uncomfortable.
5. Time is fair to everyone. Options are the enemy of time, while stocks are friends of time. The moment you buy an option, you are already standing on the opposite side of time.
6. You must take profits and cut losses. The money lost on stocks is only temporary. The money made on options is temporary until you sell, but the money lost on options may be permanent.
7. For unfamiliar underlying assets, don't easily try to trade options.
8. Don't easily add to your option positions.
9. Not trading any options at all is completely reasonable. Trading options is not investing; it's speculation.
10. Don't feel unbalanced when you see others' options easily achieving a one-day return that tops your annual return. Their potential loss might also top your lifetime's.
11. Don't use options to verify your ideas. Thinking it will rise 10% and wanting to use options to amplify that 10% to 100% is very dangerous!
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