Stocks & Commodities V. 26:11 (68): Futures For You by Carley Garner
Product Description
Futures For You by Carley Garner
BUY OR SELL?
Is it better to buy or sell options?
My favorite college finance professor used to answer questions with the phrase, “It depends.” In trading and finance alike there are no black and white answers. The answer is based on your personal risk and reward profile as well as market conditions, and not necessarily my judgment. However, since you asked, I will give you my opinion.
A successful long option trader must be exceptionally patient and have excellent timing; there is little room for error. Anyone can get lucky from time to time, and in some cases, a long option can seem like a lottery ticket to the fortunate holder; however, those stories are few and far between. Most option buyers are forced to watch helplessly as the values of their options tank. Conversely, during times of low volatility, option buyers drastically increase their odds of making a profit because the potential of a subsequent explosion in volatility will have the same impact on their long option trade.
BUY OR SELL?
Is it better to buy or sell options?
My favorite college finance professor used to answer questions with the phrase, “It depends.” In trading and finance alike there are no black and white answers. The answer is based on your personal risk and reward profile as well as market conditions, and not necessarily my judgment. However, since you asked, I will give you my opinion.
A successful long option trader must be exceptionally patient and have excellent timing; there is little room for error. Anyone can get lucky from time to time, and in some cases, a long option can seem like a lottery ticket to the fortunate holder; however, those stories are few and far between. Most option buyers are forced to watch helplessly as the values of their options tank. Conversely, during times of low volatility, option buyers drastically increase their odds of making a profit because the potential of a subsequent explosion in volatility will have the same impact on their long option trade.
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