Just like in calculus class, options trading comes down to eliminating as many unknowns to get to the right answer — narrowing the field of uncertainty, if you will. It’s not enough to bet that an underlying security will rise or fall. That’s just one part of the multi-faceted equation. The other major components are time and magnitude of price movement.
If any one of these elements are off, you’re going to be having a bad day at the office.
