Options traders often size positions assuming they can exit at any price, then get caught when stocks gap overnight. Use the stock chart to decide if a trade is still valid, not the option price, and always size with a cushion for gaps.
One of the biggest mistakes that I see novice options traders make is they size for zero and they take a big size if I take a position. Uber was a just traditional break and retest, so made a high. There was a level here and I was playing a bounce off of this level. Uber ends up tanking in off hours, so when it opens, it opens here. Now, if you are trading options, you don't have control over that. You have to provide yourself a cushion because what happens is price opens up below where you were going to set your stop. I typically don't size for zero, but I allow myself a cushion, so I'm not going to set a stop limit based on the price of the option. I'm looking at the stock chart in order to determine whether my play is still valid.
