Mastering Options Trading: Our Proven Risk Management Blueprint

In this article, we break down the exact risk management strategy that has kept our options trading profitable for over a decade. Learn how we manage losses, target gains, and leverage high win rates - plus how multi-bagger trades and runner discretion play a role in boosting long-term results.

The Risk Management Blueprint Behind Our Options Trading Strategy

How We’ve Stayed Profitable Every Year for Over a Decade

This isn’t just a quick tip sheet - consider this an insider-level look at how we manage risk while trading options at GAR Capital. It’s the kind of insight we typically reserve for our Masterclass members, but today, we’re sharing!

💡 The Core of Our Risk Model

Our entire strategy is built on controlled risk - every trade has a purpose, and every dollar has a job.

Here’s the breakdown:

• We risk 1–2% of our total portfolio per trade
• On some setups with high conviction, we may go as high as 4% max
• That amount is our stop-loss, meaning we accept the risk that the option could expire worthless
• We don’t panic-cut positions - if the trade setup remains valid, we let it play out
• That means yes, some of our losing trades go to zero-and that’s by design.

🎯 Profit Targets and Win Rate

• We typically target 40–50% gains on our option positions.

So how does this work if some losses are -100% and winners are capped at +50%?

It’s all about math and consistency.

✅ High Win Rate: Our average win rate consistently stays above 72%, which is the minimum threshold needed to be profitable using this model.

✅ Big Wins Happen: A few times each quarter, we land a few monster trades - returns of +150%, +200%, even 400%+. They’re not everyday plays, but they’ve been a consistent part of our edge year after year. Success comes when patience and preparation meet opportunity - so stay ready, stay in the game.

🚀 Runners: The Game-Changers

Some of our trades reach their technical targets and keep going to further targets. Think TP1, TP2, TP3 etc. These are what we call runners - contracts held beyond the 1st base target for maximum return potential.

• Holding runners is up to each trader’s discretion
• We don’t include runners in our official win/loss stats - but they’ve led to gains of +1,000%+ for many members
• Knowing when to hold a runner? That’s masterclass-level trading. Upgrade here if you're ready to level up

📈 Why This Works (Even Without Runners)

Even if you never held a single runner, the system works year after year after year:

• ✅Small, defined risk
• ✅High-quality setups
• ✅Tight execution
• ✅High win rate
• ✅Controlled, unemotional trading

This is how we’ve remained green every single year since we began - now over a DECADE strong.

Here is our Options Trading Journal Snapshot of April and May: Check out our 2024 Options Trading Return:

📓 The Journal That Tracks It All

We’re not just trading and talking - we’re tracking. Our GAR Capital Trading Journal documents every options trade we take. If you're serious about growth, consistency, and perfecting your strategy and seeing where your weaknesses may lie, this journal is a must-have resource.

🔁 Final Word: Don’t Sweat the Trade

The bottom line?

When you only risk 2% per trade, your entire outlook changes. You’re no longer trading from emotion - you’re executing a calculated strategy. And when the market presents the right setup, you’re ready to capitalize. Allow your premium on the contract to be the wiggle room for your set-up. Be patient, be calculated.

Every trader has a different risk appetite - and that’s okay. But this is how we do it, this is what works for us and why we’ve built long-term, repeatable success trading options.

Thanks for coming to my TED Talk - or should I say, my trading desk talk. See you on the Trading Floor!