outofthemoney

When trading out-of-the-money futures options, you should have defined trading expectations. You should expect most of your trades to be losers, but make a lot of money on a small percentage of trades. This is just the opposite of using an option selling strategy, where you expect to make money...

Time decay of options is the main reason why commodity traders lose money when they buy out-of-the-money options. Option contracts only last for a limited amount of time. Therefore, options lose value every day and that rate accelerates in the last 30 days of the option. Basically, you are...