One more important thing to remember about the premium on an option. There is a time decay. Every day the option is worth a little less than the day before. At least part of what the buyer is buying is the time to see how things are going to go. This wastes away to zero.
Stock options are like agency.
They increase choices and that is good. There are ways to use options that increase or decrease risk. In the end, you will live with the consequences of the choices you make. Click here to sign up for Meridian's FREE email updates. 2001 Meridian Magazine .