Few things are certain in life. But as the old saying goes, there is nothing quite so certain as “death and taxes”. As an Options Trader, I would enthusiastically add option time decay to that list.
Options offer traders and investors more leverage and risk mitigation than just purchasing shares outright. For example, if I were to purchase 100 shares of a stock at $100 per share, my total capital outlay would be $10,000. Options give us the right to buy or sell at a certain price for a pre-determined length of time.
I could control that same 100 shares by purchasing an "At the Money" call with a $100 strike price with 90 days to expiration for perhaps $6 per share, or $600 total capital outlay.
That’s powerful leverage. My downside risk is also limited to....Continue Reading Here.
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