It is critical to note that since options do move quickly, that there are times where you won't be able to get out at a 50% loss. I've seen this happen many times. It seems to happen more so with options that are purchased prior to earnings. For so many reasons, even if the stock has a higher than expected number and perhaps even a rosy outlook for the future, the street might figure that all of that info is baked in and they sell off the stock.
You need to treat it your options trading as a business. You want to pay low transaction costs, minimize your losses, and get deals on the services when you can. This will improve your odds for success with option trading.
Getting set up with a reliable low cost online discount broker for options will increase your chance for success and keep more money in your pocket. As mentioned before, low brokerage costs rein in your break even price.
I try to get out when my option trades goes down 30-40% of my entry since my experience has shown those trades that go down 50% rarely make it back to the initial entry point and don't forget about the transaction costs.
The various option picking services will offer specials from time to time. If you are satisfied and plan on being there for a while go for the discounted price. This also helps you with your profitability. At one point Change Wave offered the service for $299 per quarter or $995.00 for the year. Signing up for the year was a no brainer. With how the market panned out in 2009, I saw numerous specials with these services. One of them even offered a lifetime membership and it carried a 90 day money back guarantee.
Some of the option picks were generated around earnings. I had a big homerun with Jon Najarian and a RIMM call he offered. I have since observed that these earnings plays are not always the way to go (for me). continued