Using R multiples is one of the most widely used strategies by professional traders for managing risk and tracking results. The R multiple concept is extremely easy to use and implement into your own strategy. With this simple idea, money management will become a breeze! If you have any questions or comments I would love to hear them!
In this video I present a cautionary tale from trading history to show why it is a very bad idea from a risk management standpoint to hold options until expiration. This example comes from NASDAQ:MNST in 2014 when NYSE:KO made a surprise announcement that led to a huge move in the stock.