Professional options traders don't put much emphasis on direction unless there is a distinct trend. Even then, there is no way to tell if you are at the end of the price trend or a continuation of the price trend. Professional options traders trade non-directional and allow the markets to come to them. Professional traders begin with a modest position until they are proven right. If they are proven wrong, they can modify their position and align option position with the market to take advantage of the current condition. Professionals use options strategies like iron condors, calendars, double calendars, vertical spreads and other strategies that can be modified and adjusted to reflect the current market conditions. In more practical terms, an options trader may commit 10-15% of capital allocated to an options position to initiate the trade. The balance of the allocation is used to make adjustments to account for market movements and the often wrong initial options trade. Options trades that may begin as horrible trades can eventually lead to very profitable trades as the size gets larger and position comes in full alignment with the current market. What may be the most significant distinction between retail investors and professional options traders is the notion that retail investors try for home runs and professional traders are happy with singles and doubles.
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