By: Mark Fenton  mark@sheridanmentoring.com Do you ever ask yourself why is this option trade losing money? As a trading mentor I get this question frequently. When you are in an option trading strategy there are three components to making or losing money. Price movement, volatility changes, and time decay. Price Movement First, price movement. If you are in a directional trade then you need the price to move towards the options that you bought and/or away from the options that you sold. I think that concept is easy enough to understand. Many traders however use strategies that are “non directional”. Strategies such as iron condors, calendar spreads and butterflies allow for some price movement in either direction, as long as it’s not too extreme. These strategies are trying to take advantage of time decay, which we will cover in, a bit. It’s important for directional and non-directional traders to keep an eye on their position delta. Your position delta tells you how much money your trade will make or lose with the next dollar in price movement of the underlying. You can use the Delta number to get a sense of how well an up or down move will benefit […]