Risk Management7 min
What Is the 1% Options Risk Rule?
The 1% rule in options trading means never risking more than 1% of your total account value on a single trade. On a $10,000 account, that's a maximum of $100…
Bernardo Rocha
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Risk Management
Risk Management8 min
How to Use VIX Options to Hedge an Options Portfolio
VIX options allow traders to buy protection against sharp spikes in market volatility. When the stock market drops suddenly, the VIX — the CBOE Volatility…
Bernardo Rocha
Risk Management7 min
How to Rebalance an Options Income Portfolio
An options income portfolio — particularly one running multiple iron condors — drifts from its intended risk profile over time. A winning month increases the…
Bernardo Rocha
Risk Management8 min
How to Avoid Over-Leveraging in Options Trading
Over-leveraging in options trading means deploying more buying power per trade than your account can safely absorb a loss from. It is the most common…
Bernardo Rocha
Risk Management8 min
What Is a Trading Risk Budget?
A trading risk budget is a predefined framework that sets the maximum amount of capital at risk at any given time — both per individual position and in total.…
Bernardo Rocha
Risk Management8 min
How to Recover from a Losing Month in Options Trading
Recovering from a losing month in options trading starts with one non-obvious step: do nothing different. The instinct after a loss is to change something —…
Bernardo Rocha
Risk Management8 min
The Psychology of Holding Iron Condors Under Pressure
The biggest iron condor losses most traders experience are not caused by the market doing something unexpected. They are caused by what the trader does when…
Bernardo Rocha
Risk Management7 min
How to Set Realistic Income Goals for Options Trading
Realistic income goals for options trading start with the math of what premium-selling strategies can generate across different account sizes and market…
Bernardo Rocha
Risk Management7 min
How to Use a Trading Journal for Iron Condors
A trading journal for iron condors is a record of every position you open, including the conditions at entry, the strikes and credit received, and the outcome.…
Bernardo Rocha
Risk Management7 min
What Is a Portfolio Stress Test for Options Traders?
A portfolio stress test shows what would happen to your options positions if the underlying market moved sharply in a specific direction or if implied…
Bernardo Rocha
Risk Management6 min
How to Diversify an Options Income Portfolio
Diversifying an options income portfolio means spreading exposure across multiple underlyings, expirations, and — where appropriate — strategies. The goal is…
Bernardo Rocha
Risk Management8 min
What Is Survivorship Bias in Trading Strategy Evaluation?
Survivorship bias in trading is the tendency to evaluate strategies and traders based only on those that succeeded — ignoring the larger number that failed and…
Bernardo Rocha