Hey guys, thanks for taking the time to check out my question. As I have been studying options for the past few weeks, these have been the questions lingering in my mind that I have not been able to find an answer to. 1. Why would anyone buy extremely far OTM calls? It would seem almost impossible to make money on these calls due to the huge IV drop one would see at those price targets, which would in turn drop the price of the call. Is there something I am not seeing as to why anyone would make OTM calls part of their trading strategy? 2. Following up with the above thought about calls, am I wrong to be more inclined to base my option trading strategy around puts then calls. It seems that the most a calls value can do(even on high beta/ extremely volatile stocks) is possibly double, triple, or maybe quadruple. But with puts, if you pick the right stock you can make as much as 10,20,30, or even more times your money. Now I realize calls do better when the market is going down then puts do when the market is going up, but since I am mainly interested in tight OTM options, this added protection would not seem worth it to me since an OTM call would still eventually expire worthless not matter how high the IV was. Now I understand the market generally has an upward bias so would this be why I would not want to trade puts in favor or calls, or what would be the reasoning behind making calls a large part of your strategy? With my current understanding of calls, the only calls that seem to be worth it are the deep in the money calls that have a delta of 1 where your premium would be safe and you would essentially be buying the underlining security but adding a bit of volatility. 3. Are options price action based of off a formula using the IV, time decay, and stock price, or is it just based off the bid and ask? I would think it would just be the bid/ask, but when using thinkorswims option theoretical price calculator, I am amazed at how I can go back in time to different dates and enter in current dates price action, IV, and time left and it will tell me the price spot on of what the market it has it at? This makes me question whether options are based on the markets bid or whether it is just based of a formula? 4. When selling straddles, wouldnât the seller have to always be concerned about one of the in the money options being exercised? Or am I misunderstanding how selling options and them being exercised works? I have also heard that very few options ever get exercised, if this is the case why not just take the chance selling expensive ITM covered calls and risk whether you get exercised on or not? Or is it that all ITM options are always exercised, but relative to how often they change hands very few options are actually exercised? 5. Are ETFs and Options on ETFs (such as SPY, DIA, etc) taxed as futures are (the 60/40 rule) or are they just taxed at the normal short term capital gains rate? I this topic had been brought up before when I searched the forum, but no one was able to provide a definitive answer, so I was hoping someone could help. 6. Does anyone know of a good back-testing software package specifically made for options and futures, or is there any other software I should look into to help me with options trading. Thanks for any help you can provide with any of these questions, and if anything is to confusing at this point please tell me and I will try to elaborate more on what I was trying to say.