Thou shalt make risk management your #1 priority when trading options.
Thou shalt not let greed be your guide to position sizing.
Thou shalt not kill your trading capital by selling too much option premium against a trend.
Thou shalt not trade option contracts before you fully understand their pricing model.
Thou shalt not buy options that are far out of the money, where the odds are stacked against profitability.
Thou shalt take profits off the table when possible while trading weekly options.
Thou shalt not copy another trader’s option trades. Trade your own plan, using your own system, when you are prepared.
Thou shalt not trade in illiquid options. You shall only trade options that have the highest volume and tightest bid ask spreads.
Thou shalt honor volatility and how it impacts option pricing. Put option insurance becomes more costly with volatility, and call option contracts grow more expensive in an uptrend.
Thou shalt remember time decay and option expiration. Options go down slightly in value each day, even with no movement in price, and you must be diligent to profit in most option strategies.