Seven risk management rules every options trader should write down

Options are a risk-transfer tool. The moment they become a lottery ticket, the outcome is statistical, not skilful. The seven rules below come from watching real client books over two decades.

One: risk a fixed percentage of capital per trade, ideally under 2%. Two: never average a losing option position. Three: define your exit before entry, in points, not in feelings. Four: avoid naked short options unless you fully understand margin escalation.

Five: respect expiry-day gamma; premium decay cuts both ways. Six: track your net delta across positions, not per trade. Seven: keep a weekly journal of what the market did versus what you expected.

Traders who follow the list rarely produce spectacular months. They also rarely blow up, which is what compounds.