10 mistakes that kill small options accounts (under $500)

If you're running a sub-$500 account, these are the mistakes I see blow people up most often.

**1. Buying cheap OTM because they're cheap.**
A $0.10 option that needs a 15% move to profit is a donation, not a trade. Deep OTM expires worthless 85–90% of the time. Stick to delta 0.30–0.55.

**2. Holding through earnings without a plan.**
Stock beats, gaps up 5%, your call is down 30% — that's IV crush eating your vega. Either close before earnings or size a deliberate earnings play (straddle vs. implied move, or a credit spread to harvest the crush).

**3. Ignoring theta.**
A 2-week OTM call that doesn't move in week 1 is down 40% by week 2 even if the stock hasn't moved. For a 2-week thesis, buy 30 DTE. Time is insurance.

**4. No exit plan before entering.**
Down 40% → fear. Up 60% → greed says 200%. Both end the same way. Write it down before you click buy: entry, profit target, stop, time-based exit.

**5. Over-concentrating.**
80% of a $400 account in one TSLA weekly is gambling. Max 20% per position. $400 account = $80 max trade.

**6. Trading illiquid options.**
Bid/ask spread wider than the option's premium means you lose 30–40% the moment you enter. Stick to SPY / QQQ / AAPL / MSFT / TSLA / NVDA / AMZN / META. Check the spread every single time.

**7. Chasing FOMO late.**
NVDA up 8% by 11am, options already 3×'d, you buy the top, reversal takes 70%. If you missed the first move, you missed the trade. There's always another.

**8. Not knowing the implied move.**
Before any trade: what's the ATM straddle worth? How much does the stock need to move for your call to profit? If the market is pricing a $5 move and you think $3, you lose even if you're right on direction.

**9. Fighting the tape.**
Calls in a downtrend, puts in an uptrend — low-probability games. Use 1-hour and daily for trend, 5-minute for entry timing. Trade with the higher-timeframe trend.

**10. PDT violation.**
Three round-trip day trades in 5 days under $25k = account flagged. Use a cash account. If you're at 2 round trips in 5 days, hold overnight or sit out.

Happy to debate any of the 10 in the comments.