Options Trading: How to Turn Every Friday into Payday Using Weekly Options! Generate Weekly Income in ALL Markets and Sleep Worry-Free! by T.R. Lawrence

Author:T.R. Lawrence
Language: eng
Format: mobi
Published: 2023-08-03T05:00:00+00:00

The stock moves in your direction, the options become very profitable, and you take profits.

The market moves against you, the option loses value, and you exit with a loss.

The market remains flat to sideways and does nothing, letting time decay and erode the value of the option. Even though the stock may move in our favor, you have a loss.

An option buyer has a 1/3 chance of making a profit! An option seller has a 2/3 chance of making a profit!

What Would You Rather Be—An Option Buyer or Seller?

There is no right or wrong. Many option buyers make very large profits because they understand the risks and have the knowledge to ride the trends. For consistent income, sleep-at-night insurance, and creating your personal ATM, option selling is the ticket.

Time Decay Is Our Best Friend

An important component of an options contract is time decay, which is the gradual or exponential loss in value of an option as it approaches its expiration date. Remember, options have a time value that is factored into the pricing of the option—it’s why weeklys are cheaper than monthlies in the first place. With each passing day, the time value of the option diminishes, which means the value of the option also declines.

Also, the rate of time decay is proportional to the time left until the option expires. In other words, time decay is gradual; the farther away the option is from the expiration date, the more gradual the time decay. Theta is a measure of the rate at which time passes. This rate increases the closer the choice is to its expiration date.

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