Purchasing OTM Stock Options

What is it that brings people to purchasing an out of the money OTM stock option to begin with? Some people might have gotten the idea from somebody else who mentioned it to them, while somebody might have found out that buying options only costs a few bucks. However, most people, we believe, do so because they are trying to hit the jackpot. No matter what your reasons are or were, you have most likely come to the realization that almost all of the options you purchased are not worth anything anymore. So why does this happen? There are a number of possibilities here; it is possible you purchased the option way too far out of the money; maybe you did not give yourself a good enough option expiration time; it’s possible you chose the wrong direction; or you might have purchased options that were overpriced derived from disguised volatility. There are a number of problems to rise above. Being triumphant in option purchasing is one of the most difficult things to do. It is not easy do option trading. All of the factors need to be juggled so that they all work for you at the right moment and at the same time. It is very difficult for people to make the right decision at the right time. A lot of people get it right at one of the steps such as in their directional call but maybe the option expired before the stock moved. Perhaps the stock went in the right direction at the right moment but the strike price was too out of the money for it to become profitable. There are a number of things that can occur when options are bought. When a stock is purchased, a person has an indefinite amount of time to get it accurate on his forecast. And he does not have to worry about his stock expiring at any moment. The person that invests in stock only has to concern himself about one price point, which is the price at which he purchased the stock in the first place. The stock does not need to move a certain distance simply to be as profitable as he would when purchasing out of the money options. The idea we are going to try to have people understand is the difference between buying options and selling options and we also want people to realize that selling of options when done in the right way, can bring about a much higher profit in the option market. Obviously buying options can be profitable too though.