1
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Can a new trade erase an old loss?

2
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No.

3
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That loss stays in the notebook.

4
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An adjustment changes the risk you still hold.

5
00:00:11,363 --> 00:00:14,725
It cannot change money already lost.

6
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Today, Mira checks her choices when a trade goes wrong.

7
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Our prices are made up for learning.

8
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We use sixty five units in the money example.

9
00:00:26,712 --> 00:00:30,988
That is an example quantity, not a current rule.

10
00:00:30,988 --> 00:00:34,275
All those results are before costs.

11
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This is education, not personal trading advice.

12
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Mira writes her exit plan before opening a trade.

13
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She records every option and its quantity.

14
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She records the entry money and possible full loss.

15
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What would make her reason for trading no longer valid?

16
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She sets a money loss alert for the whole position.

17
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She writes a closing deadline and checks upcoming events.

18
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She checks cash for closing, including charges.

19
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A stop trigger does not guarantee the price or fill.

20
00:01:13,261 --> 00:01:18,286
A small alert cannot make an unaffordable full loss affordable.

21
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Touching a short strike is a reason to review.

22
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It is not an automatic instruction to roll.

23
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First, she can close the position and record the result.

24
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That ends the exposure from those closed contracts.

25
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Second, with several matching sets, she can close complete sets.

26
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She cannot split one standard lot into half a lot.

27
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Third, she can keep the trade within her original plan.

28
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The reason must still hold, with enough cash and protection.

29
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Hoping to avoid booking a loss is not enough.

30
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Fourth, she can consider a replacement trade.

31
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It needs its own risk and funding checks.

32
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The old loss is not a reason to enter again.

33
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Take our earlier condor.

34
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It received eighty rupees per unit.

35
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Now closing every leg costs one hundred twenty per unit.

36
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Mira uses the eighty received earlier.

37
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She must add forty more from her cash.

38
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Eighty minus one hundred twenty is minus forty.

39
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Multiply that forty rupee loss by sixty five units.

40
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The total loss is two thousand six hundred rupees.

41
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This is a realised loss.

42
00:02:42,893 --> 00:02:45,094
The trade has closed.

43
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Mira pins the receipt into her notebook.

44
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Charges make the final result worse.

45
00:02:52,588 --> 00:02:56,225
Now consider a separate new credit spread.

46
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Its two strikes are two hundred points apart.

47
00:02:59,813 --> 00:03:03,826
It receives forty rupees per unit at entry.

48
00:03:03,826 --> 00:03:09,075
For sixty five units, that brings two thousand six hundred rupees.

49
00:03:09,075 --> 00:03:12,450
But both contracts are still open.

50
00:03:12,450 --> 00:03:17,050
That is the most this new trade can earn before costs.

51
00:03:17,050 --> 00:03:22,000
Its maximum expiry payment is two hundred rupees per unit.

52
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Subtract the forty received.

53
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That leaves one hundred sixty.

54
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Across sixty five units, maximum loss is ten thousand four hundred.

55
00:03:33,350 --> 00:03:38,400
This needs correct matching legs, kept intact through expiry.

56
00:03:39,100 --> 00:03:42,837
Suppose the new trade earns its full profit.

57
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The old loss is still two thousand six hundred.

58
00:03:46,775 --> 00:03:50,550
The new profit only covers that same amount.

59
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Together, they make zero before costs.

60
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After all charges, the combined result is still negative.

61
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Now suppose the new trade makes its full loss instead.

62
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Add ten thousand four hundred to the old loss.

63
00:04:06,850 --> 00:04:11,562
Together, they lose thirteen thousand rupees before costs.

64
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Moving a trade to another strike or expiry is called rolling.

65
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A later expiry keeps money at risk for longer.

66
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It does not reset the loss record.

67
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With separate entry orders, buy the protective option first.

68
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Confirm its filled quantity before selling the related option.

69
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If the short fails, that bought option still costs money.

70
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Check pending orders before trying again.

71
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Avoid duplicate orders.

72
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When exiting, close the short first.

73
00:04:48,570 --> 00:04:52,633
Confirm it is closed before selling its protection.

74
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Closing may need cash before margin is released.

75
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If only one of two short lots closes, one remains.

76
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Keep protection for the quantity still open.

77
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Cancel old pending orders that are no longer needed.

78
00:05:09,470 --> 00:05:12,470
An order message is not a fill.

79
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Check actual positions.

80
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A cheap wing can still provide important protection.

81
00:05:19,768 --> 00:05:24,018
Remove it, and the old loss limit can disappear.

82
00:05:24,018 --> 00:05:28,493
Moving it farther away often increases possible loss.

83
00:05:28,493 --> 00:05:33,619
Moving the other short closer narrows the comfortable expiry range.

84
00:05:33,619 --> 00:05:37,331
A market reversal can then hurt that side.

85
00:05:37,331 --> 00:05:42,131
Adding lots multiplies both premium and possible loss.

86
00:05:42,131 --> 00:05:46,806
Our practice rule forbids adding size to recover losses.

87
00:05:46,806 --> 00:05:51,619
Check every current leg, quantity, cash need and cost.

88
00:05:51,619 --> 00:05:56,131
Include closed losses and the open position together.

89
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If the changed risk is unclear, use the exit process already understood.

90
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First, keep the old loss in the notebook.

91
00:06:06,513 --> 00:06:11,738
New credit is a new responsibility, not recovery already earned.

92
00:06:11,738 --> 00:06:17,475
Second, compare closing, reducing, keeping, and replacing the position.

93
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Use the written plan and the full remaining risk.

94
00:06:21,376 --> 00:06:25,900
Third, protect the quantity that is actually still open.

95
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Check fills, cash, and costs for the whole position.

96
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Next, we look at news and event days.

97
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Why can a sudden jump spoil an exit plan?