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Risk & Paper Trading

Position sizing: the 1–2% rule

The #1 reason new options traders blow up isn't bad analysis — it's bet size.

Risk no more than 1–2% of your account on a single trade. On a $10,000 account, that's $100–$200 of premium per trade.

Options can go to zero. Sizing small means a total loss is a tuition payment, not a funeral.

Hard truth

Most bought options expire worthless. Your edge comes from survival and selectivity.

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