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Buying options instead of the underlying asset(UA) makes some sense to me
but I worry about volatility and time decay. The idea of writing options
doesn't agree with me either, and spreads sound as though they may be
difficult to enter and if the strike price at the end of the trade is far
different than the strikes that I entered the option spread at the market
may be illiquid. The idea of buying options still makes the most sense to
me(I know; sell don't buy options) as my trading system is somewhat long
term. This is why I don't always want to enter a futures contract; the risk
is usually too great. So if I trade for the long term(a few weeks or maybe
3 months) perhaps volatility and time decay don't matter as much as if I
were trading for the short term; a few days?
Another reason that I like the idea of buying options is that they can be
excercised. This is important if the market is illiquid. Writing options
has no such provision.
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