Becoming an Option Trader

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Yesterday’s trade turned into a lemon about 30 minutes before expiration. Today, I’ll try to make some lemonade. Although the call side of the iron condor lost money, the over all credit we received for the iron condor provide a small profit of $16.10 after deducting the transaction fees. We had risked $300 on each side of the trade. It would have been possible, but unlikely, to lose a total of $600. If we use the higher risk level, we received a return on risk of 1.78%. Annualized that would have been 652%. Contrast that return with a market that has been dipping in bear territory since the beginning of year, and I think I’m tasting some lemonade.

Yesterday’s trade also has provided an experience that can teach us something. Why did yesterday’s iron condor do OK, while the iron condors we opened the previous week leave us with a significant loss when one side of those iron condors failed? Maybe we can find answer this question by consider how intrinsic and extrinsic values function in an option contract. Recall that intrinsic value is simply the difference between the strike price and the price of the underlying. When a strike is ITM, it has 0 intrinsic value. It’s price consists totally of extrinsic value, which is mostly time value. When we had to buy back the short call, it had only a half hour left, so its extrinsic value was fairly low. When we closed the call spread, the short leg was priced at $1.80 and the long leg was at $1.00, giving us a net debit $1.80 on that spread (80 cents more than the credit we’s recevied for the call spread when we opened the trade). A half hour before expiration we were entering the region with high gamma risk. Had we not exited the trade when we did, we may have lost a lot more on the trade. It’s somewhat calling that before close, SPX returned to levels below our short call strike, and had we stuck with the trade, we’d have achieved max profit. But that’s Monday morning armchair quarterbacking. The secret to success on this strategy lies in minimizing risk. If we do so effectively, we should expect to see long term profits. At least that’s what we’ll try to do as we continue to experiment with this trade.

Another reason that we were able to hold the line on our loss lies in the highly liquid nature of SPX options. Having tight bid-ask spreads as well has high open interest levels means that we can exit quickly when we need to without losing too much to the spread.

Today we’ll try another SPX trade. I’ll add to this post after it opens.

Here’s a copy of the fill we received:

My limit orders filled a couple minutes after I submitted them. I set the limit price 5-10 cents above the mid price. Because the volume is so high on SPX, you can usually get a pretty good fill on it. I priced both spreads at $0.50, hoping to get a total credit for $100, and got a favorable fill on the call spread and a total credit for $105. Max loss on each side is $395, yielding a ROR a little above 26%. The short strikes were selected at 20 delta. The stop losses were set at the short strikes.

Stay tuned.

Trading is closed. Our contracts have expired worthless, and we earned $105 less $2.60 transaction fees, net gain is $102.40. Take a look at today’s price chart for SPX.

The bottom horizontal line is our put short strike; the top line is the call short strike. Entering the trade about 1:30 ET appears to have served us well. Throughout the trade we stayed in pretty safe territory. Maybe it’s a good idea to wait until the market day is well established before ordering our trades.

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This week, we will put into action what we’ve discussed so far about vertical spreads. On Monday, September 19, we’ll open two vertical credit spreads, one bearish and one bullish, applying the criteria we’ve discussed for choosing the underlying and the contracts making up the spread. We will than track these trades throughout their lifecycle, and discuss the rationale behind decisions we make regarding management of the trade. All will be recorded here as updates to this post.

We may make a profit or suffer a loss on these trades. Our goal, of course, is that these trades profit. But if they don’t return a profit, we want to minimize the loss they suffer. Profit or loss, here’s an opportunity to gain insights.

Monday, 9-19-22. I decided to open three bull and three bear trades instead of a just one of each. To make things a little more interesting, I decided to trade three different issues, Adobe, McDonalds, and Morgan Stanley. I entered the trades with consideration of the criteria discussed in earlier posts. Here are images of their profiles.

The table below shows the max risks and gains for each vertical spread. The ADBE and MCD spreads expire on 9-23-22. MS spreads expire on 9-30-22.

Spread	Max Risk	Max Gain
ADBE Call	202	48
ADBE Put	170	80
MCD Call	216	34
MCD Put	205	45
MS Call	166	33
MS Put	169	30

Many will recognize the profile images to be those of iron condors, which have been constructed by pairing an OTM bull put spread with an OTM bear call spread. The short leg of each spread was selected close to a delta of 25. In all cases, I judged that an area of weak support or resistance complimented the break-even points. The percentages indicate the likelihood of the trade closing in each of the three segments associated with the trade.The blue dashed vertical lines indicate the break-even points for each of the spreads making up the iron condor. I prefer to manage an iron condor as two separate trades and establish separate exit points for each spread. The profit level is 80% of max profit. The exit to minimize loss is at the break-even point. I implemented the exit plans by construction an OCO order pair for each spread. The profit order for each OCO pair is 80% of the pair’s credit. The exit for loss is an order to sell the spread at market price if the underlying reaches the break-even point. The table below summarizes the exits points for each trade.

	ADBE	MCD		MS
Call Profit	$0.16	$0.07		$0.06
Call Loss	MKT> $310.75	MKT> $260.36		MKT> $92.34
Put Profit	$0.10	$0.09		$0.06
Put Loss	MKT <$284.55	MKT <$249.60		MKT <$83.69

Tuesday,9-20-22, morning. Ten minutes into trading today, we took our first profit. We closed the ADBE call spread at our profit target. We grossed $65 on the trade. Transaction fees were $2.60, leaving a net gain of $62.40. Our max risk on the trade was $170. Our net return on risk was 36% over one day. Our enthusiasm, however, is dampened by the performance of the ADBE put spread, which, would lose $34 if we closed it now. Never the less, the put spread is still above its short strike with the potential for its max gain. Although time is on our side in this trade as long as ADBE continues to trade above $285, we may consider closing it early as ADBE’s price continues to plummet today.

Tuesday, 9-20-22, after market close. The table below summarizes where we stand before accounting for transaction fees. So far, we’re ahead, despite the SP500 losing 1.13% of its value today.

Underlying	Share Price	Call Spread		Put Spread
ADBE	291.06	+65 (Closed)		-24
MCD	255.41	-9		+11
MS	87.21	+8		-6

Thursday, 9-22-22, morning. After yesterday’s announcement from the Fed the markets initially rose and then fell dramatically. The ADBE’s put spread hit our loss exit. Both of MCD’s spreads closed, the call spread at the profit target, the put spread at the loss exit. MS’s call spread closed at the profit target. Here’s our things look currently:

Underlying	Share Price	Call Spread		Put Spread
ADBE	291.06	+65 (Closed)		-102 (Closed)
MCD	255.41	+39 (Closed)		-55 (Closed)
MS	87.21	+27 (Closed)		-29

The performance of these trades is disappointing. ADBE and MCD gave us a combined net loss of $53. Transactions fees were $10.40. In total, we lost $63.40. The best we can say is that we avoided the max losses on these trades of $793. Could we have managed risk better? Many more experienced traders suggest avoiding trades when going into a major economic event. What do we make of MS with its later expiration date still being viable? Perhaps we’d have been better off trading a bit further into the future, choosing an option with more time left. These are considerations as we conduct further experiments in trading options.

All three of our experimental trades have now closed. Here’s how they turned out.

Underlying	Share Price	Call Spread		Put Spread
ADBE	291.06	+65 (Closed)		-102 (Closed)
MCD	255.41	+39 (Closed)		-55 (Closed)
MS	87.21	+27 (Closed)		-53 (Closed)

Things didn’t go so well for us. It didn’t go well for many investors. The SP500 opened on Monday at 3849. Today it closed at 3693 for a loss of 4%. The max that we could have lost on our trades was 1128, if sides of each trade turned into losers. Realistically, that would be quite unusual. The far more likely scenario would be a max loss of half that amount, 664.Our realized loss was $210 (18.6% of the absolute max 37.2% of the realistic max) These numbers can better inform risk assessments in the future. What could we have done differently? We could have chosen a wider spread between our short strikes, as well as trading further out into the future. We could have foregone trading at all during a week with a Fed announcement. We could have shaved a few dollars off our loss by taking letting our bearish spreads expire and thus gaining 100% of the max profit on them.

Key take-away: Keep up with market impacting news and fully consider your exits and have them in place.

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Once successful options traders find an underlying and a trade that meets their criteria, they need to decide where they want to exit the trade. How much profit do they expect on the trade? Where do they set the exit point for a trade that’s not doing well?

There are many approaches for establishing these exit points, but for the case of simplification, this post will only look at one technique that can be applied easily when trading vertical spreads.

Exit for profit. Determine how much of the max profit you expect to make on the trade. Traders may use a percentage of max profit at or over 50%. My preference is to initially set the profit level at 80% of max. So if the max gain is $0.50 per share, I’ll submit a limit order to close the trade at $0.10. I’ll monitor the trade closely, and if it pops in the first few days, I’ll consider closing it at a lower percentage. My reasons for doing so are two-fold. First, I view the max risk for the trade as having increased by the unrealized gain. Say our imaginary trade has a max loss of $150 against the max profit of $50. If we experience an unrealized gain of $25, we’re now actually risking $175 on the trade. Our return on risk (ROR) now has declined from 33% (50/150) to 14% (25/175). Second, consider the return on the trade in respect to how long the trade has been open. Suppose, our trade has been in force for three days and can now be closed with a profit of $25 (33%). If we calculate a 3-day return of 33% projected to a year, we get an annualized return on risk of over 3300%. Such capital efficiency is strong rationale for closing the trade. Keep in mind that this discussion is simplified, and further thought about it will reveal additional nuances worth consideration. For example, if the trade consists of multiple contracts, you might considering scaling out of it–closing on some of the contracts to preserve profit and leaving other contracts open. You’ll also want to be aware of corporate actions or other factors that can affect your trade. For example, you may want to close the trade early to avoid the uncertainties associated with an upcoming earnings report, or an upcoming vote on legislation that might affect the underlying’s price.

Exit to minimize loss. A vertical spread has a built in maximum loss, but successful option traders will be unwilling to experience it. A simple approach to establish our loss-limiting exit is to close the trade if the underlying price passes through the break-even point of the trade. Keep in mind that when we selected our trade, we determined areas of support and resistance and bought into an assumption that the underlying would be constrained by those levels. If it breaks through those levels, our assumptions are no longer valid. If we continue the trade, we’ve abandoned the rational our trade was based on. Instead, we’re now relying on hope that things will turn around. In life, sometimes hope is all we have, but its weak support for continuing a trade that’s soured. Setting the loss exit at break-even is a good place to start, but when the underlying price gets on the wrong side of the short leg on our vertical, our trade needs more attention. Do the math on what happens if the short leg is assigned; that is, if an option buyer of the contract that we have sold exercises, what impact will that have on our bottom line? Be very, very worried if the trade is approaching expiration and the short leg is ITM or close to it. Keep in mind that the long leg of the spread has been our insurance against assignment. it alone defines the max risk we’ve assumed in the trade. When that contract expires the risk becomes undefined. Let’s look at what can happen after expiration on an imaginary trade. Suppose our trade consists of a single short put at $90 and a single long protective put at $88. Let’s further assume that our max risk on the spread is $150 and our max profit is $50. Our spread expires with the underlying at $89.75. We now are on the hook to buy the the underlying at $90. We need to cough up $9000 to meet our obligation. Prior to the reopening of the market, the underlying continues to lose value, and it opens on the next trading day at $78. We are now sitting with a hundred shares of the underlying worth $7800, and our portfolio has lost $1200, a lot more than the $150 max loss expected when the spread opened. Don’t put yourself in this position.

Key take-away: Manage exits to minimize risk and maximize gain and capital efficiency.

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The previous post discussed five dimensions we can use to shape a vertical spread to fit our needs. Today’s post focuses on the features of the underlying issue that will increase the likelihood that our trade will be profitable.

• Liquidity, which is indicated by tight bid-ask spreads for the underlying as well as for its option contracts. High volume for the shares of the underlying as well as high open interest in the option contracts we deem appropriate for our trade.
• Apparent areas of support and resistance that suggest price levels within a range that will make our trade profitable. See an earlier post for an extended discussion.
• Decreasing Volatility, which will compliment the time decay that will profit our trade. Many posts have addressed volatility. Use the search tool to find them.

Here are some rules of thumb I use:

• Bid-ask spreads should be different by less than 10%. Ideal open interest in in the 100s, but at least 5 or 10 times the number of contracts you want to open.
• Break even points should be greater than resistance or less than support levels.
• Look for issues that have an IV percentile above 60 and implied volatility greater than historical volatility.

Cautions. Be wary of opening trades over earnings reports. Consider how the underlying might respond to late breaking news that the market hasn’t had time to adjust to.

Key take-away: Of the thousands of equities and funds that are traded, most will be inappropriate for our purposes. Choose wisely.

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I’ve written before that successful option trading has a lot of moving parts, but I’ve invested a lot of energy into learning them one at a time. My focus has been on vertical spreads. It’s been my one thing for now.

Most people refer to vertical spreads as a trading strategy. I don’t want to play the role of word policeman, but I prefer to think of verticals as a tactic that supports the strategic growth of value in one’s portfolio. For me vertical spreads are short-term transactions that are chosen and managed in a way that contributes towards the accumulation of wealth. It’s like a nutritionally balanced meal or a trip to the gym or the pre-breakfast jog or the time logged on the Peloton that promotes a lifestyle of physical and mental well-being.

First and foremost, I like vertical spreads because they define both the risk and profit one can expect from a trade. I also like them because they can return profits in any kind of market–up, down, or sideways. I really like the ability of spreads to make money even if market moves are sideways. Not to get nostalgic, but they remind me of my boyhood days on the Lake Michigan watching the waves roll up on the shore and then retreat. I see the same movement in the price charts, and seek out a level that ends in profit even if the price recedes a bit. A lot of investing involves prediction, which reminds me of the weather. A meteorologist once told me that if you predict that tomorrow’s weather will be like today’s, you’ll probably be right. So I construct vertical spreads that will win a profit even if the underlying moves a bit away from me.

Vertical spreads can be described in five binary dimensions:

1. The width of the spread, which is equal to the difference between two strikes in the spread.
2. Credit or debit, also referred to as long or short, bought or sold. When you sell a spread, you receive a credit when the trade opens. That credit equals the max profit you can receive when the trade closes. The max loss is equal to the width of the spread minus the credit when you you sell a credit spread. When you buy a spread, the debit charged to your account is the max loss that can result when the trade closes. The max profit when you buy a spread is the width of the spread minus the debit.
3. In the money (ITM) or out of the money (OTM). These are terms that are relative to the point of view of the buyer of the spread. ITM calls are at strikes below the price of the underlying. ITM puts are above the price of the underlying. If you buy a spread, you hope it ends up being ITM at expiration. If you sell a spread, you hope it ends up OTM at expiration.
4. Bullishly biased or bearishly biased. If the risk on a spread is on the downside, it is bullish. If the risk is on the upside, it is bearish. Both bullish and bearish verticals can be assembled to turn a profit if the price of the underlying varies either up or down within limits.
5. Calls or puts. Vertical spreads can be assembled from either two puts with different strikes or two calls with different strikes.

Keeping up with all these dimensions can be challenging. So I simplify my trading by assembling credit spreads that are OTM. If I’m biased bearishly, I sell an OTM call spread. If I’m bullish, I sell an OTM put spread. The two images below are of the profiles of each type of spread I favor.

Importantly, both of the trades shown above are in territory that will benefit from the passage of time. Even if the price of the underlying varies a little bit, the trade will maintain its profitability just like the mean water level of Lake Michigan remains constant as the surf rolls.

The success I’ve had with vertical spreads depends upon more than strike selection, and in following postings I’ll focus on additional factors.

Key take-away: Find your one thing.

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Yesterday’s strong response to the CPI numbers has caused quite a stir. A headline on MarketWatch read in part, “U.S. inflation roars back.” I was thinking about the inflation numbers last night as I fell into a contrarian mood. Clearly, most people expected the report to show more progress on whipping inflation. But were the numbers really so bad?

Keep in mind that year over year numbers are strongly influenced by inflation numbers from the past. Let’s look at numbers that reflect just recent activity. The month over month CPI change for July was 0.0%. For August it was 0.01.An average of 0.005 for two months. Extrapolated over a 12 month period, that would place year over year inflation next August at less than 1%. This sounds like a win for the Fed’s approach. Core CPI, which doesn’t include energy and food, remained constant month over month at 0.3%. If maintained over the next 12 months, we’d see an annual increase in core prices of slightly less than 4%. Not so great, but not soooo bad. Certainly moving toward the Fed’s target. One might argue that the declines in energy prices will reduce future costs of goods and services dependent on them. In the last three months light sweet crude futures have moved lower from over $120 a barrel to less than $90.

I don’t know how Jerome Powell will spin next week’s report, but he does have room to make a positive interpretation of the data. As option traders, we’ll watch the market closely. Successful trading decisions will depend not so much on what Powell says, but on how the millions of traders with varying skills and methodologies for data interpretation establish the market value for thousands of stocks.

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I checked the future at 8 this morning. They were up. I found some good bullish trades and wrote orders on them. Thirty minutes later, everything began to change. The CPI numbers came out revealing an increase in inflation. The market entered a steep decline.

I canceled my orders before they could be filled. Later in the day, I took a look at them, happy that avoided what would have been rapid and significant loss.

Key take-away: Keep up with economic events. There are many economic calendars available online. Check one every morning and be ready to move quickly when the news surprises.

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Subtitle: Divert early and avoid the rush.

When you fly sometimes you can’t get to where you want to go. When your destination becomes inaccessible, you need an alternate listed on your flight plan. I also told the pilots under my command that if ceiling or visibility at their destination fell below limits, they needed to divert while they still had plenty of fuel to easily reach the alternate. Plan A was to land at the assigned destination. Plan B was to land at an alternate. Any other plan would lead to catastrophe. When you open a new trade, you also need to have a destination and an alternate.

The destination for a trade is the level of profit you expect to receive. You may calculate it as a value associated with the price of the underlying, a profit level for the trade, or a time when you no longer want to be invested in the trade. You have the same choices when considering when to exit an unprofitable trade.

Setting the profit target. On vertical spreads I set my profit to 80% of my max profit. I may adjust that lower if the value of the option pops quickly. My thinking is that if I get a return of, say, 50% within a day on an option that won’t expire for another two weeks, why not turn that unrealized gain into a realized one. Take that money off the table and look for another great trade. Keep in mind that profit alone doesn’t fully evaluate a trade. Profit divided by time is the metric to use. Making 10% in a day is far better than making 10% in a year. Also recognize that as unrealized profit accumulates in a trade, the risk of loss increases. For example, imagine a vertical spread with a max profit of $50 and a max loss of $150. It’s gone well and if you close it after a few days, you will see a gain of $40. The risk on the trade is now $190 on the spread. Review trades every day to see of they still make sense in terms of risk and potential profit.

Setting an exit point to stem the loss. Despite their best diligence, all traders suffer trades that lose. Because losing is painful, it’s tough to exit with a loss as fear and greed commandeer your thought processes. Determine when to exit a trade should it go bad at the time you open it. I usually peg this exit point at the break-even point for a vertical spread. As the trade matures, I’ll adjust closer to the level of the short strike. I’ll never let a spread expire in the area between the short and long strikes. This is an important dictum, and a future post will analyze it in detail. For now, though, let’s look at some mechanics of trade management.

First things first. Submit an OCO orders for both exits when the trade opens. OCO is short for One Cancels Other, meaning that two conditional orders are submitted, one of which will control the exit at the profit, the other of which will execute the close to minimize loss. Different brokers and different platforms have various ways of issuing orders like this, but I’ll provide an example of how I set up such orders. I currently have a bull put vertical with Morgan Stanley (MS). The short strike is at 85, the long strike is at 83. I have 6 contracts. Max loss is $477, max gain is 123. DTE is September 16, 2022, this coming Friday. Here’s the profile for the trade.

I opened the MS trade last Thursday, September 8, and it has gone well. When I opened it, I submitted an OCO order consisting of two trades, one for profit, one to contain possible loss. The profit trade is a limit order at $0.08 which would return a net profit on the six contracts of $99 before considering fees. I set the loss containment level to close should the underlying (MS) descend to or below the breakeven level of $84.50, 80% of max profit. If I close the trade now, I would realize a gain of $60. I’m tempted to close it. Do the math: a $60 gain for four days of risking $477 yields a percentage profit of over 12%, which translates into an annual percentage of over 1100%. Closing early at this level merits consideration, but in the meantime our OCO orders have us covered as we mull over this trade. If the internet goes out, or I go off the grid for a few days, or just don’t feel like trading this coming week, I can do so with but one worry: what happens if MS descends to between the strike prices and expires there. That could be catastrophic, because I’d be committed to buy MS at the short strike price of $85, but I’d no longer have the option of buying MS at the long strike price of $83. In other words, risk would be significantly higher. The safest thing to do if I can’t monitor the trade would be to revise the loss containment upward to a point above the short strike point.

Unlike the MS trade, my IBM trade is not doing well. I opened it on the 6th, last Tuesday. It’s a bear call vertical with a short strike of 130 and a long strike of 131 expiring on Friday of this week. The trade consists of 6 contracts. I used the same technique described above to use an OCO order set to set up my exit points. Here’s its profile.

Since the opening of this trade, IBM has tracked the broader market as it rallied over the last three days. It’s movement towards the losing side of this trade is worrisome. The max loss on this trade is $462. I could wait and see if things turn around. After all, time is on my side. If I do nothing and MS doesn’t go higher, the trade will return a good profit. Generally, I’ll hang onto a trade as long as theta is positive and I’m not concerned about assignment on the short strike. But what if the rally continues? Then I have two choices. The obvious one is to close the trade and swallow the loss well before it hits the max. Currently, that would amount to a loss of $84 before fees. There is a less obvious course I could take. What happens if we open a bull put vertical to counter the loss? Let’s take a look at what happens to our profile.

Combining an OTM bull put vertical with an OTM bear call vertical results in a trading profile that’s called an Iron Condor (IC). Many traders, myself included, treat an iron condor as two separate vertical spreads. Our max risk on the trade is now $360 and the max gain is $240. The high side breakeven point has moved higher to $130.40, giving a little more breathing space. There is a risk that MS could see a spike in volatility, reaching the upper loss area of the profile and then descending to the lower loss area. Technical analysis might provide a basis for judging which approach will do more to minimize what what appears to be a likely loss.

Loss mitigation. Over the weekend IBM continue its upward trajectory and exceeded the level I’d set to limit loss on the trade. What happened with IBM demonstrates what some traders refer to as weekend risk or after hours risk. I knew that my order to close the IBM trade at market would result in a loss, and I was resigned to it. The best I could do was to mitigate by trying to offset the loss with a gain that could be achieved by opening a new bullish trade. Within a couple of minutes after market open, I succeeded in opening a bull put spread with strikes at 127 and 126 for a per contract credit of $0.24. At the same time my stop loss exit closed the original contract at market for $0.61. My net per contract loss on the original trade was $0.38, which amounted to a total loss on the 600 shares involved of $228. About an hour and a half later I saw that I could close my second trade for $0.09, a profit of $0.15. This action left me with a combined net loss on IBM of $0.23 per share for both trades. Multiplying that loss by the 600 shares involved left a loss of $138. Quick action this morning recovered a significant amount of the loss on the original trade. It’s never good to lose money on a trade, but losing less is always better than losing more. Notice in this example, The $138 loss is considerably less than the maximum risk of $462 I had accepted on the original trade. You never want a trade to get close to max loss.

Key take-away: Establish exits both for profit and to mitigate loss when you open a trade. Update exits as conditions change, not on the basis of fear or greed.

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Stardate CE09.09.2022

Logs are tedius things, and I’ve done a lot of thinking on how to ease the pain of having to record each trade and various details about it. Eventually, I came up with a radical approach: I rely on my account statement to do the recording, while I determine how to analyze it. To make this approach work, you need to get your record of trades in spreadsheet form. The specifics of how to do that will depend on your broker and your trading platform. I favor using Excel, but any decent spreadsheet application should work. What’s important is that you learn how to use more advanced features on the spreadsheet. Be able to use formulas to calculate fields and be able to import external data into your spreadsheet. If you have skills in using databases, such as MYSQL or MSSQL, you might consider uploading your spreadsheet data to the database and using the database’s query language to reveal insights.

When you trade, you create data, and data is the currency of our age. So save it, but intuitive analysis also has a place in trading. I’m not talking about superstition or lucky hunches. Scientific studies start with a hypothesis, which is rigorously tested. So should you. If you think profit can be made by trading options on stocks that show decending implied volatility, test it by trading such issues on a paper account. Your bottom line over time will support or negate your hypothesis. Do you think you have technical skills that forecast price action? Test yourself by looking at a chart segment from last month or last quarter and seeing if your expections regarding levels of support or resistance hold up. You might consider using an idea log for recording your intuitions and ideas about how they might be tested. Periodically read old entries in the log. See how your thoughts have changed, how they’ve improved as you’ve gained more experience and learned more things.

Key take-away: As Yogi Berra said, “Life is a learning experience only if you learn.”