Numbers Can Be Deceiving

Numbers can be deceiving. There are many times where numbers aren't as bad as they seem, but there are plenty of times when they seem to far exceed the reality behind them. I'm not talking about the economic numbers from this morning, but trade results. Traders can often make numbers sound better than they are and cloud what truly lies behind them.

For instance, my Wal-Mart (WMT) earnings trade from Wednesday can be sold right now for $1.75 after a $0.59 entry. This looks terrible. In fact, I can call it a triple or say I made a 200% profit against my risk. Some trades will even call it a 300% gainer. In reality, none of these are correct. The fact is that I was net long 2 puts and net short 3 puts. So not only did I have a cost of $0.59 per combination, but I also had a margin requirement....306 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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