Day Trading Using Options

Options that offer leverage and loss-limiting capabilities, would seem like day trading options would be a great way to invest. In reality, the day trading option strategy faces a few different problems.
First, the time value component of the option, tends to dampen any price movement. For near-the-money options, while the intrinsic value may go up along with the underlying stock price, this gain is offset a little by the loss of the time value.
Second, due to the reduced liquidity of the options market, the bid-ask spreads are usually wider than stocks, sometimes up to half a point, cutting into the limited profit of the typical day trade.
If you are planning to day trade options, you must overcome these two problems.

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