During the early part of a new year, I take inventory of what I learned in the previous year and where I need some improvement as an options trader. I looked back on 2025 and noted that certain options trading habits supported my success.
Note that these are good habits. They come from not just watching the market action, but participating. I’m calling this out, because as we all know, not all habits are good ones. This is true in trading as in life.
I have seen traders make questionable choices that result in success. And not just once, but many times. Once bad habits are in place, it’s hard to undo them. Plus, you might be able to get away with poor trading habits during a bull market. In a bear market – or even during a bearish trend – you will probably get wiped out.
But why be negative? These are some of the habits that supported my success in 2025.
These options trading habits support success
Know what you’re trading
This may sound like obvious advice, but here’s why I’m sharing it: Some traders are buying crypto these days, without knowing a single thing about cryptocurrencies, let alone the name they just bought. Imagine that!
No matter what asset you’re trading or investing in, you need to understand its fundamentals, not just it’s rosy outlook. Does it fit your trading/investing criteria? If you don’t know, don’t buy it.
Play both sides of the trade
Get in the habit of playing both sides of the trade. Yes, that means buying puts when you buy calls in a name, even when you don’t want to do it. And even during a bull market.
You can read more about the strategy here. Essentially, puts help tamp down volatility in your portfolio, saving you from disaster when markets suddenly drop.
Don’t trade more than you can afford to lose
When you place a trade, size your position properly by only trading what you can afford to lose. This is one of the very best habits any trader or investor can cultivate.
Not only will you sleep better at night, you won’t risk losing everything. Think it can’t happen to you? That you can just pile into a winning a trade to maximize profits because the stock will just keep going up like it has been?
Nothing goes up forever. If you do not manage risk, you tempt fate. (Learn more about risk management principles here.)
Good options trading habits are achieved by learning and experimenting to find what works for your trading strategy. With good habits in place, the odds of trading success are in your favor.
