Sharing loss porn is a therapeutic exercise whereby the proud, self-proclaimed degenerates of WallStreetBets struggle valiantly and at great expense for the coveted title of biggest loser. Boasting impressive losses of 90% or more, these poor souls at once inspire pity as well as laughter. One can’t help but chuckle at the sight of such mind-boggling losses.

For the rest of us (those who trade to make money rather than lose it), it’s best to avoid these investing no-nos. Do so, and you’re guaranteed to make money! (Or, at the very least, lose it less quickly.)

Buying or selling too many spreads

As I’ve pointed out before, spreads are risky (especially for new option traders) because when they go to Hell, they take your collateral with them. Having one or two spreads out of a dozen trades might be okay, but if spreads make up 50% or more of your option positions you’re asking to end up behind the Wendy’s dumpster.

Buying leaps on shitty stonks

This requires a little introspection: is there a reason you’re not buying the shares outright, or perhaps a call option with a closer expiration date? If you can’t answer honestly you might be using the long runway to expiration as an excuse to gamble on a shitty stonk.

It’s okay to allocate some of your capital to riskier stocks and options, but you don’t want half of your portfolio tied up in dreamy growth stocks. For example, I have a position in Opendoor (OPEN), arguably a risky play. I believe it’s a well-managed company, a potential disruptor in the real-estate industry and it shows solid top-line growth. (Also, it managed to turn out a profit in the first quarter of 2022 – something no one, not even I, was was expecting.) However, I also recognize Opendoor faces risks, so I didn’t bet the farm on it!

Buying or going long on any stock recommended by WallStreetBets

I shouldn’t say any, but if you’re reading this article, you probably know the ones I’m talking about. Let me preface by saying that I love WallStreetBets for the same reason most people do. It’s hard to look away from a train wreck. However, it’s disconcerting to see so many young investors encouraged to sink their precious little capital into silly ideas because they are caught up in the feeling of belonging and community WallStreetBets fosters. In part, this is done by encouraging a confession of one’s investment sins as a sort of expiation.

Confession feels good and makes one feel better about these alarming losses, so the cycle continues, and the impulse to gamble with risky strategies is established. The truth is simple: the sort of losses one sees on WallStreetBets on regular basis are only possible when you have inexperienced noobs gambling with risky option strategies.

Sharing loss porn might feel good, but let’s be real: a hedge fund manager can afford to lose a few hundred thousand dollars in an afternoon – you can’t. Remember: the purpose of investing is to make money, not to yolo your paycheck into some crappy company that’s circling the drain and diluting its shares to stay alive.

Closing thoughts

Avoid the above mine-fields, and you’ll preserve your precious capital and have one less reason for your spouse to leave you. Analyzing the technicals and fundamentals of a stock and not overpaying for it will get you a lot further than blindly piling into the latest meme stock or media darling.