Thanks for your prompt reply and explanation Joe. I was thinking to do straight call/put to pre-define my risk. Follow up question please.
If I buy a call for 30 days and close out the option in 15 days, Do I get credit for 15 days that I did not use?
The answer to your question is no! You do not get credit for the days you did not use. In fact, you penalize yourself. You paid for 30 days, not 15. If the option is in-the-money part of its value is time and the rest of the option's value is the amount by which the option is in the money, less what you paid for it. If the option is not in-the-money, all of the premium you paid was for the time of the option's life. If the option expires out-of-the-money it becomes completely worthless and you have lost what you paid.
The most foolish way to deal in options is to buy them. 65% of all options purchased end up losing money and are closed out prior to expiry. 80% or more of options that go all the way to expiry lose money. All the advantages are to the seller of options. If an option finishes at-the-money, the seller, not the buyer wins. Options are almost always overpriced to the buyer. If you buy a European style option, you have no right to sell it before expiry (Example: Options in China are European Style).
Buying options allows you to know exactly what the risk is. The problem is that you have a 65% chance of losing what you paid for it, and an 80% or greater chance of losing your money if the option goes all the way to expiry.
If you want to make money 96% of the time with options, please consider taking our Instant Income Guaranteed course. It is very easy to follow and you will learn the best way to deal in options. If you can't handle the price of the course then at least learn how to sell options. We have a Webinar "Money Master," and an eBook that will teach you when and how to use options. Money Master is what I recommend for everyone to learn and teach their children and grandchildren.
Master Trader Joe Ross wants you to learn trading and he created products to do just that, teach you how to trade. Go to our website to find which ones best fit your trading style. Check out "Our Philosophy".