Why I Don't Trade Fear Ahead of Earnings

When you trade options, one of your main fears tends to be an event that triggers a move against you. A five-contract trade, opened at $2, can be vaporized in a day on some bad news. $1,000 can be nearly wiped out. It's not easy to recover from that, either. I've been there many times, and it stings. At the same time, if we use good risk management and control, these events will inflict only minimal damage.

You may ask: "Bob, why even go there at all? The market is open all other days aside from when earnings are released, so why go through the agony of a binary event?" These are good questions to ask, but let's break this process down a bit in order to glean a better understanding....346 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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