Retail investor: I sold a put way bigger than usual. The premium was too good to pass up.


Me: Could you actually cover it if you got assigned the whole thing?
Retail investor: ...honestly, no. It'd wreck me.
Me: So one bad move on that single trade & your whole account is in trouble?
Retail investor: I didn't really think about the size, just the premium I got...
Me: That's the key thing... you risked everything for one fat premium to feel like a genius for a week.
Retail investor: So position size matters more than the premium?
Me: Way more. I never sell more than my base can comfortably cover. Ratios always in check. The market could drop 60-70% & I'm fine.
Don't size a trade off the premium instead of the risk...One oversized put can undo years of good ones.
Keep your ratios in check & let your base secure the puts.
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