Options trading has exploded in popularity in 2025. Retail brokers are making it easier than ever to jump into the market, and social media is full of stories about life-changing trades. But behind the hype is a sobering reality: most new traders lose money not because the odds are against them—but because they make the same five mistakes over and over again.
Here’s a breakdown of the top errors new options traders are still making—and what you can do to trade smarter this year.
The Mistake:
Too many traders enter positions based on hot tips, trending tickers, or a “gut feeling.” They have no trade thesis, no stop-loss, and no idea when or how to exit. This creates a dangerous habit of chasing momentum instead of executing repeatable strategies.
The Fix:
Before entering a trade, clearly define your:
Having a defined strategy removes emotion and helps you avoid knee-jerk decisions. Use a trade journal to document your process—it’s one of the most underrated tools for new traders.
Also, consider “paper trading” while you develop your strategy. Most platforms allow you to simulate trades without risking real money. This can sharpen your instincts before capital is on the line.
The Mistake:
New traders often try to “make it big” by buying cheap weekly options far out-of-the-money. The low cost is appealing, but the odds of success are slim—and small losses can snowball quickly. One or two bad trades can wipe out a significant portion of your capital.
The Fix:
Start with risk-defined strategies like debit spreads, credit spreads, or even cash-secured puts. These approaches give you known maximum losses and help preserve your capital.
Stick to a rule like the “2% rule,” where you never risk more than 2% of your account on a single trade. This ensures you live to trade another day. Compounding consistent gains beats swinging for the fences.
You don’t need a big account to succeed—but you do need discipline and patience.
The Mistake:
Many new traders think options are just about price direction—but IV plays a huge role in how options are priced. Ignoring IV leads to poor timing and overpaying for contracts, especially around earnings or macro events.
The Fix:
Use tools to assess IV rank or IV percentile before trading. When IV is high, it means options are expensive—favor selling strategies. When IV is low, buying premium makes more sense.
Understand how IV collapses after events like earnings announcements. A trade can go in your direction, and you might still lose money if IV drops sharply.
Timing and context matter. Study how volatility changes around events and structure your trades accordingly.
The Mistake:
Panic selling, FOMO, revenge trading—emotions kill more accounts than bad strategies ever will. It’s easy to get caught in a spiral of overtrading after a loss or chasing a stock just because it’s trending on social media.
The Fix:
Trading is a mental game. The most successful traders aren’t just skilled—they’re emotionally disciplined.
Even more powerful: reflect regularly. After each trading day, write down what you did well, what you rushed, and how you felt. Emotional awareness builds resilience over time.
The Mistake:
Many beginners isolate themselves, trying to “figure it out” with free YouTube videos and Reddit threads. Without mentorship or feedback, they repeat the same mistakes. Worse, they often don’t know what went wrong—or how to fix it.
The Fix:
Surround yourself with other traders—especially those who’ve been in the game longer. Having a space to ask questions, share strategies, and talk through trades gives you real-world perspective.
You’ll learn faster when you’re part of a learning-focused community. The key isn’t just copying trades—it’s understanding why they work.
If you’re looking to get serious about options trading this year, consider joining the Dorian Trader Trading Club. It’s a private community where traders of all levels come together to learn, share insights, and grow their skills.
Inside the club, you’ll get:
Whether you’re brand new or working toward consistent profitability, the Trading Club is built to meet you where you are—and help you take your next step.
👉 Join us at doriantrader.com/trading-club and start trading with more clarity, structure, and confidence.
At Dorian Trader, we help traders of all levels get started, improve and, ultimately, make more money with options.
Dorian Trader LLC2700 Post Oak Blvd, 21 FloorHouston, Texas 77056
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