When I first ventured into trading options, my net worth was primarily derived from a combination of savings, traditional investments like stocks and bonds, and other liquid assets. At that time, my net worth was modest as I was relatively early in my investment journey. I had allocated a specific portion of this net value, recognizable as risk capital, specifically for learning about and trading in options. This decision was a strategic move to potentially enhance my financial portfolio by diversifying with options, while also managing the risk by not exceeding the limit of my risk capital.
As I progressed and gained more experience, my net worth evolved, reflecting the returns from my growing expertise in options trading along with investments in other financial instruments. The key to my approach was to gradually increase exposure as my understanding deepened and to implement strong risk management techniques to protect my net worth.
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