Most option traders accept that not all trades turn out to be winners, but dealing with sudden, unexpected losses just after entering a position presents a dilemma. Youre faced with two choices: Exit the trade at a loss, or implement a repair strategy that adjusts to the new market conditions and has the potential to restore the trades profitability.

It is essential to analyze a number of what-if scenarios (i.e., what could go wrong) before placing any trade especially if you sell options, because of the risk of unlimited losses. However, repair strategies should be part of your trading plan regardless of whether youre a buyer or seller.