1. We assume that you have a $5,000 account for the purpose of option trading. If you have a smaller account, adjust the numbers accordingly. 2. Money management plays a far greater role in successful trading than the ability to pick a good entry or exit point. It is very important not to invest more than $600 - $700 in any one position so that you have enough capital to spread over 7-8 trades. So if you want to buy a $1.5 option, buy no more than five contracts, for a $1 option buy 5 or 6, for a $5 option buy one contract. It is critically important to use approximately the same amount of money in each trade. 3. Never maintain more than 2 or 3 positions at any given time. It is very difficult to watch more than 2 or 3 positions effectively, especially if you hold a full time job. 4. In most cases you should take a 100% profit whenever it is available. Don't be greedy. Cash in your account is not going away. The gain in an open position may evaporate very quickly. If you really like the position, sell half of it to return your invested capital. In some rare cases the position will open in the morning with several hundred percent profits; take it immediately. 5. Do not place any orders before the market opens. 6. Do not try to chase the market. If you need to get out of a long option position, place the limit sell order at the bid price. If you need to get in, place the limit buy order at the ask price. 7. Do not use a market order unless in an extreme situation. Be prepared to possibly get a much worse fill in this case. 8. For the most part, we will take new positions at the end of the trading day, ET time. If for some reason you did not get into a trade, do not get into it after the fact. Wait for the next trade. 9. When we enter the trade, we sometimes will place a mental stop at the 50% level. You may use actual stops but it is not always practical or feasible. 10. Option trading is very risky. You may lose all money invested in long calls and puts plus commissions. Consider your actions carefully. Past performance is not a guarantee of future results.