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Lost your savings trading options. What now?

Stop trading today, before anything else. Then write down what's left, find what went wrong, and only come back with small, fixed sizes. Most big options losses come from size, not from bad luck.

Options guide · 6-minute read · Updated 2026-10-28

Stop first

Close the app. Place no new trades this week. If you have open positions you can't sleep with, close them, but don't open anything new.

If you're worried you'll trade anyway, ask your broker to remove options from your account. Many brokers can lower or turn off your Options approval level on request. A locked door helps on a bad night.

If you feel hopeless or unsafe, call or text 988 in the US or Canada. If trading has become something you can't stop, the US National Problem Gambling Helpline is 1-800-GAMBLER. Reaching out is a strong move.

Take stock on one page

Write down four numbers: what you put in, what's left, any debt the trading touched, and the bills due in the next three months. That's your real position. It's usually less bad than the panic says, and it's always easier to face on paper.

If you share money with a partner, tell them. My page on telling your spouse you lost money trading has a short script.

For the wider first steps after any market loss, see what to do after losing money in stocks.

How it usually goes wrong (an illustration, not a trade idea)

Here's a hypothetical account, with made-up round numbers. It's a common shape: a win, then bigger and bigger bets.

Someone starts with $20,000 of savings. They buy short-dated Call options, cheap contracts that pay off only if the stock jumps fast.

The first trade was the most dangerous one. It won, so the next bet was bigger. Each loss led to a bigger bet to get it back.

Three things did the damage:

• Size. One trade went from 10% of the account to all of it.
• Leverage. A call controls 100 shares for a small price. That's Leverage: small moves make big swings, both ways.
• Lottery calls. A cheap, short-dated call needs a big move, fast. If the move is late or too small, the call can expire worthless at the Expiration date, and the whole price is gone.

Buying options vs selling them

When you buy an option, time works against you. The price melts as expiry gets closer. When you sell a covered call or a cash-secured put, time works for you, but the stock can still fall and you can still lose a lot.

Selling isn't a way to win money back. It's a slower style with different risks. If you ever go that route, the wheel strategy explains it, and position sizing for selling options shows how to keep each trade small.

The tax side

A realized loss can lower your tax bill. As of October 2026, in the US, capital losses offset capital gains, then a limited amount of other income each year, and the rest carries forward. In Canada, capital losses offset capital gains, and losses in a TFSA or RRSP can't be claimed. Rules change, so check the IRS or CRA pages, or ask a tax professional.

The slower path back

1. Wait at least a month. Use it to learn and rest.
2. Paper trade first. Log every trade as if it were real.
3. Come back small. A fixed, small account you could lose without hurting your life.
4. Write the rules down. A max size per trade and a loss limit that ends the week. See revenge trading for why.

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