I was with a friend who showed his decent MTM profits to me which he made from today’s options trade.
I was delighted to see his profits, though out of sheer concern, I cautioned him of the risks involved while trading naked options.
To me surprise he gave me an interesting analogy of Tumbbad movie.
He said, I take profits in Options trade like the guy in Tumbaad took gold coins home rather than waiting for more gains and eventually getting killed.
The movie narrates greed is good but to a certain extent. If you are too greedy, you get killed. The veteran traders will second these thoughts that the same is usually true with trading in stock market.
Lesson: In stock market, especially in options trading, it’s better to book out profits else all the profits remain paper profits & belong to the market.
If you’ve no clue about the reference I made, watch Tumbbad once (imdb rating – 8.2 stars). Those who’ve already watched it know what I’m talking about.
