An enormous part of trading is perceiving your surroundings - you are far from that. In the mean time I highly suggest you accept recommendations from those who have developed that ability. You want to ignore everything this RaVar guy says. He knows nothing about options. NOTHING!
So one thing I've noticed .. he's the only one that tried to help. Then everyone else spends the rest of the time telling me how bad he is ... Which is fine, but then they don't actually give their own thoughts sooooo ....
That's exactly why I could care less. I figure the people that are genuinely looking for assistance and information about trading, will notice that over time. The people who don't? Are generally the ones who completely ignore an issue that I actually addressed and then say something stupid along the lines of "But he's ignoring XYZ risk" ! If I demonstrated exactly what I did? I'd hear: "That's too complicated!" or "That requires too much capital!". If I simplify everything, and include a bit of risk (we are traders after all, and shouldn't be afraid of risk) for the sake of simplification .... then I hear about the risk I'm introducing (that I mentioned at the outset I was introducing when I said it, and that I would do it differently) There's no pleasing the High School drama crowd. Best just to block 'em, and move on. Like I said, I figure the people that are genuinely looking for assistance and information about trading, will notice the above over time. The rest are too bitter and jealous Incidentally, on a side tangent? That's why when you develop your own legal structures? Make associates junior partners. Not employees. Much easier to get rid of a troublesome High School Drama partner, than it is an employee; less legal fuss.
"he's the only one that tried to help." - I think I did one time. You disagreed with the second half of what I said - End of help. edit: I stand corrected, I just remembered, I tried telling you what to do with some way OTM put spread... so twice I tried. "Then everyone else spends the rest of the time telling me how bad he is"... Like I said about perception. If you can't see a blinking neon sign... "sooooo ...." - I'll be polite and not tell you how this movie ends.
I'm sorry if you call what you said above advice ... We need to work on what is meaningful advice ... You said I don't know what I'm doing and I should accept advice from those who do and to ignore ravar .... All I said was he's the only one who seems to actually offer advice. The majority of the rest come in here and shit all over him but don't actually help answer any of my questions. So again... How is your "advice" worth me reading and commenting on? Now if you would have given me names of people who you perceive as knowledgeable, then this would be a different discussion, but you did not. So if you would like to try again, I will be happy to respond accordingly and we can have a lovely convo on that... Right now I see one guy trying to help, right or wrong, he's the only one throwing out suggestions, then a bunch of keyboard warriors swarming, but not actually putting anything out there ... Am I wrong?
Actually there are different possibilities, depending on what you want to do. If you buy deep ITM your position becomes a proxy for the stock, so you gain if it goes up and you lose if it goes down. you are less affected by theta and vega. If you buy ATM you have peak gamma, which means that your gains increase exponentially if the stock goes up and your losses progressively slow down if the position goes against you. The drawback? You have peak -Theta and peak +vega as well. That's why you will still lose money if the move is too "gentle" or doesn't come soon enough, even if you are right on direction. OTM is a lottery play, you are not spending much, but you know that the only chance of winning is an explosive move in a very short time. In any other scenario you lose. Tail events are however not as rare as implied by the normal distribution, so this could also be a viable strategy if repeated in a systematic way and with some directional bias. Moral of the story: you should choose how deep in the money you want to go depending on your opinion about the underlying. You can further tweak the position by opening short positions to reduce/offset the greeks that you think might be bringing about the most risk.
I replied to @raVar’s post #20 because it is so woefully misguided but then deleted it as it would cause severe cramps for many people here. Suffice it to say that he is dangerously clueless. So much wrong with the following that it’s comical: Buy the calls, six to eight months in the future, with strikes three to four deep ITM. That way, if I'm right? Then hopefully the falling IV will help me enough to overcome some of the other math, and my delta's will thus improve with the passing of time (though time is working against me). BUT IF I'm right, then that might be the best way to go. Mathematically speaking. Six to Eight Months in the future ... 4 or 5 strikes deep in the money. But he is trying to help, right?
I'm sorry if you call what you said above advice ... We need to work on what is meaningful advice ...So again... How is your "advice" worth me reading and commenting on?" It's not. Problem solved. "Now if you would have given me names of people who you perceive as knowledgeable, then this would be a different discussion, but you did not." That would be terribly rude to some very nice people who I see trying their hardest but just not there yet. "So if you would like to try again, I will be happy to respond accordingly and we can have a lovely convo on that..." Thanks for the offer.
Terminology evolves over time but buying a naked call still doesn't sound right. Shouldn't you use the term unhedged call?