Retail investor: I keep buying calls & they keep expiring worthless. Calls just don't work.


Me: What expirations are you buying?
Retail investor: Weeklies, sometimes a couple weeks out. Cheaper that way.
Me: There's your problem. Short dated calls get eaten alive by time decay. You need the stock to rocket immediately or it's dead.
Retail investor: So the calls aren't the problem... the timing is?
Me: Exactly. When I'm ultra bullish I buy LEAPS. A year or two out. Time decay barely touches me & the company gets real time to grow into it.
Retail investor: So go way longer dated?
Me: & I usually fund them with premium from puts I sold on the same company. So the calls cost me almost nothing.
Don't blame calls when it's really your expiration killing you...
Short dated calls are lottery tickets the clock destroys.
Buy long duration calls to magnify the best setups & give them time.
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