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Buy The Options With Intrinsic Value

Since time decay has a negative impact on options, it is important not to pay too much time premium from the start of your transaction. The best way to regularly achieve this aim is to buy in-the-money options.

The strategy outlined above is contrary to some investors' in that they try to go after options that have the cheapest premiums. The more an options is out-of-the-money the lower the likelihood that it will be profitable. This fact is not offset by the amount of control over losses that are offered by these types of options.

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