Up or Down, Right or Wrong is IRRELEVANT by JohnPierre LeCedre

Up or Down, Right or Wrong is IRRELEVANT by JohnPierre LeCedre

Author:JohnPierre LeCedre [LeCedre, JohnPierre]
Language: eng
Format: epub
Published: 2023-03-31T22:00:00+00:00


For example, if you buy an at-the-money call option on a particular stock to go up, the premium you pay for that option would be entirely time premium. The option has little or no intrinsic value, depending on where the stock price is relative to the strike price of your option. So if the underlying stock goes down or moves sideways, you would lose 100% of your initial investment as your option expires worthless. Even if the stock goes up slightly, you may still lose a good portion of your option premium, since the intrinsic value of the option may be less than the total premium you paid initially.



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