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This is wrong. You should not be trading options if you only have a directional view of a stock, as you will get eaten alive. Options pricing involves much more
by reverend_gonzo 10y ago
This is wrong. You should not be trading options if you only have a directional view of a stock, as you will get eaten alive. Options pricing involves much more than just the underlying stock. Most importantly, as another poster said, there is implied volatility. There is also time risk and interest rate risk priced into the option.
With options, you could be right on direction, and still lose money.
- martinko 10y agoIf your strategy is to hold them in order to exercise them you do not need to worry about their pricing.