Sometimes the best way to protect a winning trade is to simply step aside and get out before things turn south.
That’s exactly what happened in a recent trade I took in General Motors (GM) that serves as a perfect example.
The trade had already worked in our favor, and we were just looking to lock in profits. But pricing was slippery at the open — wide spreads, a little volatility and a few too many orders not getting filled.
So the move I made was simple: Instead of trying to force a higher Monday exit, I brought my target back down to Friday’s 95-cent mark.
It wasn’t about being greedy — it was about protecting what was already working.
Recognize the Signals and Stay Flexible
At the open, we saw GM ticking lower in our favor, but bid-ask spreads were wide. Even 95 cents wasn’t filling at first, and $1.05 was clearly unrealistic. The longer that held, the more obvious it became that chasing a bigger win wasn’t worth the risk of reversal.
That’s when I told everyone to move their targets back to 95 cents. Let the pricing settle. Don’t let a wide spread bait you into holding too long.
The idea was to treat this as a waiting game — a small, controlled adjustment based on what the market was actually giving us. Once spreads tightened up and the option inched closer to 95, some traders started getting filled. That was the goal.
Don’t Let Winners Turn Into Losers
There’s nothing wrong with waiting for a good price — as long as the setup justifies it. But when you’ve got known resistance overhead and a target that’s already been tested, the worst thing you can do is sit on a profitable position and let it slip away.
That’s why I emphasized reverting to the prior target. It gave us a better chance to lock in gains without second-guessing the move later. And if you didn’t get filled at 95? No problem — hold and watch. The setup was moving in our favor, and with a little more time or a slight push down, the exit would come.
You don’t have to force every trade to stretch. Sometimes the best risk management decision you can make is to take the win and move on.
Kane Shieh
Kane Shieh Trading
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*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
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