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Chapter 21 – Planning an Options Trade

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Now that you understand what can go into the value of an options trade, you can develop a good plan for getting into an option. Be aware that, unlike a short sale, you have less risk involved with an option. An option that does not meet your expectations will not be executed, but you will still lose the money you paid for the option. The good news is that you will know in advance what you can earn and what you might lose from options trade.