The Field Guide — Tried & Traded

Exits 13

How a trade ends — and why that decides more than the entry does

Does closing at 50% beat holding to expiry?Closing an options trade at half its maximum profit is the most repeated rule in premium selling. Here is what the rule actually claims, and what a test would have to show.
Exit 1 — the profit targetA profit target closes an options trade once it has captured a stated fraction of the most it could make. What 50% actually means, and what it costs you.
Exit 2 — the stop lossA stop loss on an options trade is a multiple of what you staked, not of what you can lose. Get that backwards and the stop fires far too early or far too late.
Exit 3 — the time exitA time exit closes an options trade at a fixed number of days to expiry, in profit or not. It is a rule about gamma wearing a clock’s clothes.
Exit 4 — holding to expiryHolding an options trade to expiry is the exit that costs nothing to run and is the control every other exit has to beat.
Exit 5 — the technical exitA technical exit closes an options trade when the underlying does something you named in advance. It is the hardest exit to test honestly.
Exit 6 — assignmentAssignment ends an options trade by delivering shares. Taken on purpose it is a strategy; taken by surprise it is the most expensive way a defined-risk trade goes wrong.
Exit 7 — the rollRolling an options trade closes it and opens a new one further out. It is on the list of exits because so many traders count it as one, and it is the reason losing streaks look flat.
The seven ways to exit an options tradeThere are seven ways an options trade can end: profit target, stop loss, time exit, expiry, technical exit, assignment and the roll. What each one does, and what it costs.
What is an exit rule?An exit rule is the part of a strategy that decides when a trade ends, stated before the trade opens. Here is what makes one a rule rather than a habit.
What is gamma risk near expiry?Gamma risk is how fast your delta changes as the stock moves. Near expiry it grows sharply, which is the reason time exits exist.
What is the 21-DTE exit?The 21-DTE exit closes an options trade three weeks before expiry regardless of profit. Where the rule came from, what it is really managing, and what would have to be true for it to work.
Why the exit changes the answer more than the entryTwo traders can run identical option entries for a year and reach opposite conclusions. The exit is usually why, and here is the mechanism.

Structures 17

What each strategy is made of, what it pays, and what it costs to be wrong

What a strategy is 8

Where an idea stops and something testable starts

The tests 3

A post is a test. ⚠ No result is published yet — every figure on these is still a placeholder

Method 1

How a verdict is decided, and what we will not claim

How we testHow we test a trading strategy: the data, the rules, what counts as a pass, and what we refuse to claim.

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