I never let the noise in the market affect what I’m doing.
So there’s one real big tip I want to give you today…
Is about one of the biggest factors in the market, which happens with options.
And if you’re not using it yet, it could be life-changing…
It’s called time decay. And it’s probably the most important tool in my tool box.
Time decay eats away at the price of an option over time — especially during the last week before an option expires.
To demonstrate the power of time decay, I have a completely FREE exercise you can do yourself at home:
- Pick an option on a stock. Say AMZN or TGT as an example.
- Find a call option that expires in a week or two.
- Pick a strike price near the current price of the stock, which is called “at-the-money”.
- Check back on this same exact option over the next few days as it ticks closer to expiration.
What you’re going to see — if the stock doesn’t suddenly zoom upwards… (which it rarely does)
Is that even if the price of the stock doesn’t change much, the price of the option will keep dropping more and more as we get closer to expiration.
And if you’ve an options BUYER, that’s a tragedy.
But if you’re an options SELLER — you’re golden! That’s how I’ve been trading the last few decades…
And over time, the track record you build is simply mind-boggling!
To make a long story short: I’ve made my career out of selling options while they still have value and then watching them expire worthless.
But before you put your own money into it, go do the exercise I gave you above.
If you take your time and have the patience to follow a couple of options for a few days until they expire worthless, I’m sure it will be an eye opener for you.
Trade well,
Jack Carter
P.S. Have you seen my latest project? It uses the same basic principle I described above, but we supercharge it by looking for unusual options activity, which gives us an edge. Check it out right here.
