With the market going up, and people getting more bullish, there will be an increasingly larger number of people buying call options on those stocks they expect to go up even further.
However, there will also be an increasingly larger number of people losing money on those very same call options designed to make money as the market rises.
It’s sad, but true.
There’s nothing worse than buying an option (call or put), and seeing the market ultimately move in the direction you expected, but still losing money on your option nonetheless.
This is usually the result of some all too often made mistakes.
The good news is that these mistakes can easily be corrected.
I’ll outline three key mistakes that options traders make, and then provide a solution for each one them.
— Zacks Investment Research