Buying Out-Of-The-Money Options
I have heard it all when it comes to buying out-of-the-money options. Some of the most common things I hear are…
“I was taught never to buy OTM options, they are too risky.”
“People who buy OTM options always lose money.”
“I only sell options- that way I ‘win’ most of the time.”
When I hear things like this (which is more often than you may think), it validates my affection for these trades. Why?