The Vain Hope of MORE in Options

Do you know that a majority of the options out there expire worthless? Why is this? Part of it is pure speculation. People hope, get in, and have no real idea what they are doing and enter and exit with no real game plan. They hear that stock XWZ is going to do something or it makes/does something they like or agree with and they purchase an option hoping to make money. They check back later and their money is gone.
Another problem is an example that happened to my friend. A while ago he purchased 3 thousand dollars worth of Seagate options. At the time, Seagate was going pretty well. So then the option price grew to where the options were now worth 12,000. A 4x return. My friend was bragging about it.
"Sell them", I said. "You know have a 4 fold return and thats spectacular. Take the money."
My friend came back with, "No way. They have gone up this much. I'm gonna hold maybe they will go up more!"
A week went by along with some bad days in the market. I then saw my friend again as we lifted weights together.
"Hey, how is your options coming along?"
"Yeah, they got crushed down. I just lost 4 grand. Now they are worth 8 thousand dollars. Crap."
I could tell that the potential money lost was eating away at my friend. He didn't like losing potential money. It was eating him up.
"Sell the options. You still have made over double close to triple what you put in! Take the money...if you sell now its a lock."
He came back with,"No man. I need my money back. Im gonna hold. Hopefully they will swing back."
He held on with a death grip and watched them go to zero and expire.
One thing I want to bring up is the current worth that is on paper while you are holding them is just that. Worth on paper.
Until you sell them. Thats when you get the money.
It has been my experience that if you are holding a 2, 3 or 4 bagger, you should sell immediately and take the money then move on and seek out something else.
Hopeing something further will happen is just that. Hope. The money on the other hand is real. Take it. Really, who knows what will happen after three days? Beyond that, the noise increases to the point where nothing is in focus and exact predictions go out the window. For instance yesterday I did a bounce on a stock and today I came back with 4%. Definitely on the lower side, as some bounces I make 15%, 25%, 50% or more. However, I saw that today it went up a bit for a small gain. I decided to take it. Because a win is a win and people tomorrow could decide to start selling it or an anaylist could come out with a downgrade or who knows. But now I have the money. And I am looking around for something else with that money in my pocket.
Take the Money.
www.the1045report.com