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When you buy a call option, the underlying stock must increase in price in order to profit from the call purchase. And at option expiration the underlying stock must increase above strike price of the option or you will incur a 100% loss of the option premium.
Option spread trades, however, can profit if the underlying stock is up, down or flat at option expiration giving option spreads a big advantage over directional trades.
In the video below learn how Chuck Hughes produced over $1.9 million in actual closed trade profits over the last three years trading option spreads
In today's video Chuck will explore the option trade orders he uses to increase the profit potential for option trades.
The type of option order you use to enter and exit option and option spread trades can make a big difference in your option trade profitability. This is especially true for trading option spreads. Learn how option spread orders helped produce an average return of 98% for the option spread portfolio below.
When you purchase an option you need to have an option strategy. Options are considered 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, Chuck maximizes the intrinsic value and minimize the time value of an option when he buy's options.
In this video you will learn a simple option trading strategy and 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.
Please contact us for more information on Chuck's Option Trading Seminars!