long term or multiple short term

Discussion in 'Options' started by zeke72, May 15, 2013.

  1. zeke72


    Say I'm trading options on some stocks I expect to move up or down over the long term based upon fundamentals. I'm trading options instead of buying stocks for the leverage advantage and understand I am paying a premium for the time value.

    Has anyone done a solid analysis on buying long term options (say 12-18 months down the road) compared to buying a 2 month option every 2 months? Obv the short term represents more commissions, but also I expect volitility will work in our favor sometimes when a stock moves badly against us.


  2. 2rosy


    the movement in the 12-18 month option is more due to implied vol than direction of the underlying