If you have any friends you need to turn OFF to the idea of trading options, have them watch this video! http://www.youtube.com/watch?v=Eljh8QEv7rI
I've never understood how some people are so good at sound like they're reading a script. I can't do that if I try.
It's actually not nonsense at all unless you are a gambler? Sure you'll hit the occasional 200-300% gain but more often that not your out of money options will rot away resulting in a loss even if the underlying moves in your favor.... It amazes me that most people don't get that.... Far too many get stuck with the mentality of paying little premium for naked positions. While this cheap insurance premium may work for hedging existing stock positions, it is certainly a losers game when it comes to naked options trades.
The video is certainly soporific, but it's actual content is sensible. If you're making a directional option trade that has to play out over a month or more it makes good sense to minimize the consequences of time decay and use ITM options. Of course the dreary recitation makes one wonder why people see it as desirable to use videos for this sort of thing. What ever happened to old fashioned reading?
You can easily embed Youtube videos on ET, by coping the code from YouTube to ET. <object width="480" height="385"><param name="movie" value="http://www.youtube.com/v/Eljh8QEv7rI?fs=1&hl=en_US"></param><param name="allowFullScreen" value="true"></param><param name="allowscriptaccess" value="always"></param><embed src="http://www.youtube.com/v/Eljh8QEv7rI?fs=1&hl=en_US" type="application/x-shockwave-flash" allowscriptaccess="always" allowfullscreen="true" width="480" height="385"></embed></object>