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Here is a tough question. Do you always obey your stops? If you do, or do not, why?
I will start out this with, I do sometimes obey them and sometimes I do not. The reason is because, if I have conviction on a trade, and the r/r is still good, I will hold. It's a game time situation. Crude, stops. ES, might stop. A stock, def no stop, all depending...
Option trades are in another realm. I definitely try hard not to ruin a winner. Because, spreads and vega is ephemeral. You need to cull and reap. It's just a function of not letting a good trade go bad, time and vol are massive factors. Sands in the hourglass.
It is proven that the biggest value in options exist in the shortest and longest terms. Once you know that, you know all the losers making trades to smash 30 day, and don't care about 90 day. It's not in their mandate to pay a toll out past like 60 days.
A typical guy hedges too late, and will sell vol too cheap near. That is the rule of the game. They aren't running their money or yours, so there is your edge. A big manager is at a massive disadvantage, he's always worried.
