Options are an excellent tool for risk management, not just speculation. When you have a high-conviction view that feels almost certain (e.g., "there is no way they'll hike"), buying options instead of taking a large vanilla position can protect the portfolio from a complete wipeout if your seemingly infallible view is wrong.

Combat indecision and emotional attachment by pre-committing to sell an investment if it fails to meet a specific metric (the state) by a specific deadline (the date). This creates a pre-commitment contract that closes long feedback loops and prevents complacency with underperforming assets.

To avoid emotional, performance-chasing mistakes, write down your selling criteria in advance and intentionally exclude recent performance from the list. This forces a focus on more rational reasons, such as a broken investment thesis, manager changes, excessive fees, or shifting personal goals, thereby preventing reactionary decisions based on market noise.

In a volatile, rapidly rising market, an 'options crawl' strategy allows investors to stay in the trade while managing risk. It involves selling expensive, high-strike calls that speculators are buying and using the proceeds to finance calls closer to the current price, thus maintaining directional exposure with a defined risk profile.

While holding a long-term deep value thesis, ARK Invest actively trades high-conviction stocks. They trim positions when a stock like Tesla surges to 13-14% of the portfolio and buy back in during dips. This strategy uses the market's inherent volatility and controversy around a stock to rebalance and improve their cost basis.

To manage the risk of volatile or 'bubble' stocks, investors should systematically take profits until their original cost basis is recovered. After this point, any remaining shares represent 'house money.' This simple mechanical rule removes emotion and protects principal while allowing for continued upside exposure.

To generate extra income without sacrificing significant upside, write very short-term (1-3 week) covered calls on only a part of a portfolio. This contrasts with strategies that write longer-dated calls on an entire portfolio, which often cap returns in rising markets.

Rather than passively holding a stock, the "buy and optimize" strategy involves actively managing its weighting in a portfolio. As a stock becomes more expensive relative to its intrinsic value, the position is trimmed, and when it gets cheaper, it is increased, creating an additional layer of return.

To survive long-term, systematic trading models should be designed to be more sensitive when exiting a trade than when entering. Avoiding a leveraged liquidity cascade by selling near the top is far more critical for capital preservation than buying the exact bottom.