Reducing Time-Value Erosion by Adding a Credit Spread

Time value erosion is a big problem for option traders. In some cases it makes sense to add a credit spread to the position to limit that disadvantage.

Option Collars for Volatile Markets

Traders have a love/hate relationship with volatile markets. We love them because trends can be very fast and extended and we hate them because the market can move very quickly against us. Aggressive traders seek ways to speculate and increase their market exposure during these periods and more conservative investors attempt to do the opposite. … Continued