Options have evolved from being just instruments of risk containment to fancy vehicles for trading. Well, at least we can say that about equity options.
In this attempt of creating a trading utility out of a pure hedging instrument, there is a tiny yet crucial detail that one must understand, which is the biography of an Options or in other words what happens during the life of the options.
Typically, when one buys a Call Option, the driving force is that there is a sunk cost a.k.a. premium which is the maximum loss and the profits are unlimited.
The first instance of error here is that while we do affirm the availability of the profit potential, we hardly sync it with the longevity of our own view.