Chuck Hughes: The Best Way to Trade Options

When you purchase an option it is a wasting asset due to the time decay characteristics of options. Out-of-the-money options consist of only time value. At option expiration options lose all time value. Buying at-the-money or out-of-the-money options is very speculative and there is a high probability that these type of options will expire worthless resulting in a 100% loss.

Due to the time decay of options I try to maximize the intrinsic value and minimize the time value of an option when I buy options. In this video you will learn a simple formula that will help you reduce the negative effects of option time decay. This technique has good profit potential and at the same time can greatly reduce the risk of option investing and increase your percentage of winning trades. For more information, please visit www.tradewins.com

Category:

Education

Tags:

• Chuck Hughes
• options
• wasting asset
• time decay
• at-the-money options
• option expiration
• high probability
• reduce risk
• profit potential