Option Trading Mistake #1: Buying Out-of-the-Money (OTM) Call Options

Buying OTM calls outright is one of the hardest ways to make money in option trading.
It seems like a good place to start: Buy a call option and see if you can pick a winner. Buying calls may feel safe because it matches the pattern you're used to following as an equity trader: buy low, sell high. But if you limit yourself to this strategy, you may lose money consistently. Watch the video to learn more.

Options involve risk and are not suitable for all investors. Review the Characteristics and Risks of Standardized Options brochure (https://www.ally.com/resources/pdf/in...) before you begin trading options. Options investors may lose more than the entire amount invested in a relatively short period of time.