Options Trading carries high risks and is not suitable for all investors. Major risks include:
Capital Loss: You can lose the entire premium paid if the price does not move as expected before expiration.
Time Decay: The value of options decreases as the expiration date approaches, especially for out-of-the-money (OTM) options.
Market Volatility: The value of options is highly influenced by market fluctuations and the volatility of the underlying asset.
It’s vital to have a sound risk management plan before starting to trade.