Options trading tips
- Leverage is generally not conservative because it involves borrowing money to invest. Options are the exception, a form of leverage that does not involve borrowing.
- Time value (time decay) is a depreciating form of price, and the closer the option is to expiration, the faster it decays.
- Margin for options is not a form of borrowing as it is for stock. Option margin is the cash an investor deposit as collateral.