Managing Losing Trades: What To Do When A Trade Goes Against You — Pt. 2

I want to talk about what to do when a trade goes against you.

This is the second part, already in the previous article, I talked about a trade that went against me.

I talked about the plan, and right now, I want to show you exactly what I did today, which is the next trading day in order to hopefully rescue this trade.

Managing Losing Trades Recap

First of all, let me briefly recap the trade. I sold puts on Hertz. The idea was that Hertz stays above $3.50.

If Hertz would stay above $3.50 until May 15th I would collect $875 in premium.

Now, since this is only a few days away, it will be a little bit more than $100 a day.

And this is what I’m looking for, this is my goal with this account that I use here for trading put options.

I want to show you exactly where I entered this trade on this day right here where you see this huge bar down.

Now, here’s what happened.

I entered this trade shortly before it went way down. When I entered the trade everything looked great.

But then 10 minutes later, all hell broke loose. Ten minutes later, there were rumors…