Time DecayTime decay, also known as theta, is defined as the rate by which an option's value erodes into expiration. The value of the option over parity to the stock is called extrinsic value.
The Covered Call Buy-Write StrategyFor better or worse, most investors purchase stocks with the intent of holding their shares for an extended period of time.
Trading Naked Calls and PutsAn option is a derivative trading product that is best used by investors as a hedging tool providing profit protection and profit enhancement. Although it is a powerful risk management tool, it can also be used effectively as a stand-alone trading vehicle.
