Buying Calls & Puts? You're Losing Money While You Sleep!

If you're buying stock options - call & puts - you're losing money while you sleep!
How?
There's a concept in option trading called "Theta", which signifies how much an option loses its value due to the passage of time.
This daily "time decay" happens overnight while we sleep, which can either be detrimental or helpful to your portfolio, depending on whether you're an option buyer or option seller.
In this video, I explain what Theta is, how it works, and what you can expect as an option buyer or seller.
Come watch!
Helpful resources below --
(Affiliate links are used when appropriate and I may earn a commission!)
Smart Option Seller website: www.smartoptio...
Learn how to sell put options: • Selling Put Options = ...
FREE options trading e-book: bit.ly/39sioyZ
5-Part Video Series - Sell Put Options Like A Pro: bit.ly/3uDGhOt
Flagship Put-Option Selling Newsletter: bit.ly/3Ec4UmV
Flagship Put-Option Credit Spread Newsletter: bit.ly/3sqsslq
One-On-One Coaching Service: bit.ly/3Yp5De5
Know Your Odds! Probability Calculator - bit.ly/3qMd95P
How To Piggy-Back Warren Buffett (A Best-Seller!) - bit.ly/3L0cMtY
Great books I recommend:
Get Rich With Options (My Book!) - amzn.to/3IWs1F4 (Amazon)
7 Chart Patterns That Consistently Make Money - amzn.to/3WKa2rb (Amazon)
Charting Made Easy - amzn.to/45Jr2Se (Amazon)
Options As A Strategic Investment - amzn.to/3XuiY45 (Amazon)
Option Volatility & Pricing - amzn.to/44YOn1H (Amazon)
Broker I use:
Interactive Brokers - bit.ly/3HlbSaM
Option Scanners:
Option Samurai - bit.ly/3M7SIYu
Option Alpha - bit.ly/4cDb1Q9
ORATS - bit.ly/4elOQ22
Other great services:
Day Trade & Swing Trade Options Service: bit.ly/3vtmXnU
Top AI Stock Opportunity - bit.ly/49lIptC
#1 Oil & Gas Play - bit.ly/49hldfV
Great websites I use:
Finviz - bit.ly/3N4umyM
Market Chameleon - bit.ly/3JsBLqM
Barchart - bit.ly/3NI18Gh
Option Strat - bit.ly/46038l7
Trading View Charting - bit.ly/3s1aXsk
Amazing KZbin training - Primal Video (I still use it!): bit.ly/3Ef6tk4
Gear I use:
Yeti Microphone - amzn.to/48IHEtP (Amazon)
Logitech Webcam - amzn.to/3uYp570 (Amazon)
Full list of other helpful links - bit.ly/3EeoUWo
Twitter: / smartoptseller
Facebook: / smartoptionseller
DISCLAIMER: This video is for educational purposes only and should not be construed as financial advice or a recommendation to buy or sell any security or investment. Consult with a professional financial advisor before making any investment decisions.
DISCLOSURE: Some of the links in this description lead to products & services I regularly use and think you might find helpful. Wherever possible, I use referral links, which means if you click one of the links in this video or description and make a purchase, I may receive a small commission or other compensation.
As I'm part of the Amazon Associate program, I earn from qualifying purchases.

[@12496k]

Thanks for providing such valuable insights on options- you’ve made such a complex topic easy to understand.

[@leelowell]

Glad to be of help

[@thobanimsibi1399]

Thank you very much Lee. with love from South Africa

[@leelowell]

Thank you!

[@aam3151]

Thank you

[@leelowell]

Thanks for watching

[@davidleonard4925]

Lee im not clear on the last couple minutes of the video. The idea that selling puts is good because the market tends to go higher but selling calls you dont like as risk is unlimited. I agree with you if comparing selling a naked call vs selling a cash secured put about unlimited to risk with call trade. But if you do an apples to apples comparison on apple it would be selling a covered call vs selling a cash secured put so the call trade does not have unlimited risk.

[@leelowell]

All correct, but the point of the video is showing how Theta works and how option sellers can make money by doing practically nothing. But with the unlimited risk of selling naked calls, this is why I opt to sell put options only. Selling covered calls isn't the same as selling naked calls as you need the stock shares, and that wasn't the point of the video. Thanks for chiming in though.

[@JohnsFishTales]

My worst trades this year were from buying options as opposed to selling them.

[@leelowell]

Exactly. That's why we sell options exclusively.

[@loubob21]

You can make money buying options. You need to go out 45, 60, 90 days or longer and buy at the 90 delta. Your theta decay is minimal. On spx your notional value will be approx 6000x100 or 600,000. So a 1% up move in spx will make you 6k and a 1% down move will make you even more due to volatility expansion. Your max risk is limited and your profit is unlimited. Seems nice to me.

[@kenjordan5750]

Well, I do buy options to close a profitable short Put trade early.

[@leelowell]

Smart!

[@thatpointinlife]

Lee, why would a deep in the money call option with more than 1 year to expiry, a Delta of .92, and Theta at a miniscule -0.0045 be down 5% on the day when the underlying asset was up 1% on the day. That happened on one of my LEAPS yesterday, and I couldn't for the life of me figure out why. Anyway, thanks as always. Hope you and your family had a happy Thanksgiving and have a great weekend!

[@leelowell]

That shouldn't happen, but are you relying on the "last" trade of that specific option to give you an idea of its value? If so, that price could've been an old trade that happened well before the stock went higher. Always use the current bid/ask market to give you an idea of the option's current worth. I bet you'll see a different value. Give me more details if you wish.

[@1320wolf]

I.V. was higher when you purchased it, than it is now?

[@thatpointinlife]

@@leelowell , it was the real-time current market value/daily % change as displayed on my Schwab account. Only thing I can think of is maybe there was a significant drop in Vega/I.V. that day, affecting the option price but not the underlying.

[@leelowell]

@@thatpointinlife - Possible but not too likely, as DITM options are mostly made up of intrinsic value and not much extrinsic value, which IV has a big effect on. Unless you're trading a super volatile stock that has very high IV on its options, then yes, maybe that could be the case. Have a look on Monday and see where everything is.

[@hotmic4045]

If you use TradingView, use an Implied Volatility indicator and buy your options when it’s low, sell options when it’s high.

[@worldchanges10]

Most of option educators do not go into details as to what we must watch and act accordingly for not loosing money😂

[@leelowell]

Thanks for watching