The Secret To Profiting Off Option Premiums

There’s one key thing you need to understand if you’re hoping to make money on your premiums.The focus when trading options contracts is on the right to buy or sell the underlying asset at a strike price and profit from the tickers movement.Now with premiums the focus is on the price or the premium of the option itself, rather than just the potential movement of the ticker and the goal is to profit from changes in the option’s price.And I used to lose trading premiums before I understood this…It’s also the main reason I see both new and veteran traders lose on premiums today.The key is having a crystal clear understanding of option Greeks which influence the options movement.Here’s a breakdown:1. Delta Greek: measures the sensitivity of the option’s price to changes in the price of the underlying asset. Specifically, it represents the change in the option’s price for a $1 change in the price of the underlying asset.2. Gamma Greek: measures the rate of change of delta relative to the price of the underlying asset. In other words, it shows how much delta will change for a $1 change in the underlying asset’s price.3. Theta (my name lol): tracks the rate at which an option’s price decreases as time passes, all else being equal. It represents time decay, the erosion of the option’s value as it approaches expiration.4. Vega: this one shows the sensitivity of the option’s price to changes in the volatility of the underlying asset. It shows how much the option’s price will change with a 1% change in implied volatility.(fyi premiums can also be moved by interest rates)Now once you understand these 4 Greeks you will be able to plan your premiums risk management, as well as make data driven decisions on your entries, exits and adjustments to your position. Hope this helps.To your success,Team Theta WarriorPS: This is one of the many questions we answered and taught during the live training last week and there’s no way I’ll be able to condense all of them into short emails.And after receiving tons of requests for the replay, I’m considering making it temporarily public reply to this email if the replay would help.

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