Downloads
File: Put Time On Your Side
- Uploaded:
- 16.09.09
- Modified:
- 16.09.09
- File Size:
- 67 KB
- Downloads:
- 246
- Version
- 1.0
Many
conservative income generation trading strategies depend on the time decay
inherent in options pricing for their profits. When I establish an iron condor
well OTM (out of the money), I am selling option spreads and expecting those
spreads to slowly lose value as the underlying stock or index trades within a
channel. Other traders may use butterfly spreads or place OTM credit spreads on
one side only (calls or puts); all of these trades are based on time decay
working in the trader’s favor. This is in contrast to long option positions
that lose value over time if the predicted move does not occur, so time is not
your friend for those trades.

