Which Strike Is Best? by Ihor Vysotskyy
Here’s a method for selecting advantageous options.
Purchasing call options is often considered to
be the simplest strategy when it comes to
trading options. The method is based on the
assumption that when the price of the underlying
financial instrument goes up, the call
option will also rise, generating a profit.
However, this is not always the case. Most beginners in the
options market start out by purchasing a call option, but are
disappointed when they discover they have been misled into
believing no risk is involved. Instead of profits, they experience enormous losses. This can cause them to think that
trading options is such a risky activity that they turn away
from options trading altogether.