Here's some general advice about taking any stock options advice: Don't.

More precisely, never take stock options advice from anyone without weighing it against your own criteria for an appropriate risk or trade.

Every investor has a trading and investing psychology that constitutes his beliefs, values, aspirations and gratifications about risk and wealth. No two investors have the exact same psychology.

Stock options advice is neither applicable nor credible without knowing an investor's basic options trading strategy. Without context, the content of all stock options advice is meaningless.

Are you an investor or a trader? Are you a speculator or a hedger?

What are your basic values and your core beliefs about the nature of risk?

In general, all stock options advice carries an element of risk, and no one piece of stock options advice is suitable for all investors.

What kind of options trader are you? Are you systematic, impulsive, or scholarly?

For the cautious beginner, stock options advice should be tempered with risk-aversive strategies that automatically stop losses when conditions change.

For the circumspect journeyman, appropriate stock options advice can be more aggressive, perhaps addressing how to make money more consistently by letting profits run and cutting losses short.

For the strategic professional, appropriate stock options advice may include taking a more leveraged position.

Though specific recommendations can often be suspect, there are some general principles that all option traders should follow. Here is some general stock options advice that's appropriate for all traders:

1. Whatever your tolerance for risk, don't get into the game unless you are fully prepared.

2. Study, learn, make a plan, and follow it with discipline. In that order.

3. Always have an exit strategy for getting out of the market to curtail losses. Make this exit plan before getting into the trade in the first place

If you start your trading and investing activities by following this fundamental advice, you'll build a solid foundation for all the more exotic and strategic stock options advice that will surely follow.

Dan Passarelli, Market Taker Mentoring