Can You Get Rich Selling Time?
Nowhere in investing does the old saying "time is money" hold truer than in the options market. Indeed, options pricing includes the concept of time value. The time value of an option is the portion of its market price that vanishes into thin air as the option approaches its expiration date. It's a charge above intrinsic value that options buyers pay and options sellers collect.
Indeed, collecting that time value premium is a key reason many options sellers agree to take on the obligations associated with selling options in the first place. That raises a key question: Can you get rich selling time? The premiums can certainly be tempting, but the path to turning the concept of time value into cash in your pocket can be a rockier road than it may seem. Read on to find out how it could work and many of the traps that await you if you try.
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Source Fool.com
