Think back to opening your first options account.

You filled out the form. They asked about your income, your net worth, your experience, whether you understood the risks. You clicked through a disclosure nobody reads. Approval came back in a day or two and the platform lit up.

Then they handed you a screen with a buy button on it and never asked you another question.

Not one broker in this country makes you write down what a trade costs you if it goes to zero. They'll check that you can afford to lose money in general. They will not make you say out loud what this particular position takes out of your account when it fails.

So most people never do it. They know roughly what they spent. They have a fuzzy sense of what it might be worth if things go well. And the number in the middle, the one that matters, stays a blur until the position is already red and they're doing the arithmetic in a panic at 10:15 on a Tuesday.

That blur is where the fear comes from. It's why a trader checks the screen 40 times before lunch. Not because the position is big, but because he never settled what it actually costs him.

I spent 15 years inside the brokerage industry. I watched thousands of accounts get funded and I never once saw anybody made to answer that question first. Entries are what the industry sells. Nobody makes money teaching you what you stand to lose.

The whole fix takes one sentence, written before you click buy. If I'm dead wrong on this, it costs me exactly this much.

Answer it in dollars, to the penny, or you're not ready to place the trade.

The 5 questions your broker never asked you

To your success,
Don Kaufman