Capital preservation and minimizing losses should be the most important objectives of any investor or trader. Warren Buffett is credited with the saying:
Rule No. 1: Never lose money
Rule No. 2: Never forget Rule No. 1
Oftentimes, investors are drawn to options because they think of them as a way to limit risk while still offering huge potential profits. This is true in theory, but the reality is a different story.
An option is a wasting asset. It has a limited lifespan, and every day that it draws closer to expiration, its value erodes as the chances of it being profitable diminish. This is known as time decay.
There are two types of options, and you can be a buyer or seller of either: Continue reading "Profit With Less Risk With This Options Strategy"