time decay

Nobody likes paying insurance premiums, but what if traders could collect insurance premiums? A previous article examined how to profit with a premium collection trade using Nadex spreads in an uptrend or a flat market. Traders can also collect premium using spreads in a downtrend. Premium...

Traders often see options as having two kinds of premium -- intrinsic value and time value. But this is not accurate. A third type of premium is where all of the uncertainty lies. Intrinsic value is easy to calculate. It is equal to the number of points the option is in the money. For example,...