| Exit | What closes the trade | What it is really managing |
|---|---|---|
| 1. Profit target | The position has made a stated fraction of its maximum | Giving back a win you already have |
| 2. Stop loss | The loss reaches a stated multiple of what you staked | The size of the worst trade |
| 3. Time exit | A stated number of days to expiry, profit or not | Gamma, wearing a clock |
| 4. Hold to expiry | Nothing. You let it run out | Nothing — and that is the point |
| 5. Technical exit | The underlying does something you named in advance | The reason you opened it disappearing |
| 6. Assignment | You are assigned and take the shares | A position you wanted anyway |
| 7. The roll | You close and reopen further out | Your own reluctance to book the loss |
In practice you don’t pick one. You pick a set, and you state the order they fire in.
Most strategy write-ups name the entry in detail and leave the exit as one clause at the end.
This is why every test on this site names all seven possibilities and then says which one it used.
Not in any way a test can score. The original position closes and a new one opens, usually further out in time and often larger. Counting it as an exit is what makes a losing streak look like a flat one.
Some mix of profit target and time exit, because that is what the popular options education teaches. Whether it is the best one is a measurable question and one we intend to answer rather than repeat.
Yes — that is exit 4, holding to expiry. It is a legitimate choice with a known cost, and it is the right thing to measure everything else against.
Heavily. A defined-risk spread, a naked strangle and a covered call fail in different ways, so the exit that protects one does nothing for another.
Nothing on this site has published an exit comparison yet.
The run that will is the exit ladder — the same entries, closed seven ways, scored side by side. Until it publishes, every test article states which of these seven it used and does not imply the others would have done the same.
