Best Options for Long Term Directional Bet

Discussion in 'Options' started by toby, Jun 30, 2005.

  1. toby


    I am using the Darvas System to pick stocks; that means I want to play the intermediate-to-long term directional movement of the stocks. In this case, what options should I look for?

    Any feedback would be much appreciated.
  2. MTE


    What's medium to long term? Weeks, months, years?
  3. toby


    3-6 months
  4. MTE


    You could use deep ITM Leaps as a stock replacement. That is, you buy Leap calls with Delta of 0.8 or more and a year or more to exipry as a substitute for long stock.
  5. Take a look at Calendar Spreads
  6. ========
    If you are looking long calls;
    would avoid the weak semisector for most all time frames.:cool:

    And whether you are thinking inside the BOX or outside the BOX;
    prefer underlyings and ITM, or ATM or ITM that i have sheets/paperwork on.

    Hope this helps.
  7. toby


    After reading your post a few times, I still can't get your message. :confused:

    Mind to explain? Thanks!
  8. persama


    Isn't 'Calendar Spreads' more for volatility bets, then how to use Calendar Spread as a vehicle to bet on direction?? :confused:

    Thanks in advance!!
  9. MTE


    Without going into all the details, the way to play calendars as a directional bet is to set up OTM calendars. E.g. the stock is at 50 and you think it will go to 55 by some specific time, so can enter a 55 call calendar, thus creating a directional calendar.
  10. nitro



    Too funny :D

    #10     Jul 4, 2005