My guess is because the strikes are in 2.5 increments, the others don't pay enough credit to be worth the r/r of investment. Or am I missing something?
Correct. I was so impressed with the chart that I had not noticed.... plus I had not looked at it yet, other than the chart. And yet, I knew what USO was, but it didn't click.
PM, I am working my way through the thread, so apologies if you have already answered the question... Do you have a minimum holding period before closing a profitable positon? If you have a big move in your favour a day after entry, would you exit the following day?
I know you didn't ask me but I will answer anyway. I don't exit an options trade base on time. I exit based on hitting a profit or loss target. I am trying now to close my AAPL Dec 600/605 bear call spread now. I sold it for $1.55. Trying to close it out for $.05.
PM, To me, it seems like your doing the same thing with stock options that Karen Bruton (i..e..Karen The Super Trader) is doing with Index options. She initially sells naked puts....if the position becomes troublesome... the economics of the overall trade is balanced out selling naked calls (or she goes further out with more naked puts, or both). Does that seem similar? Jeff P.M. Are you actually Karen trading your personal account with stock options? "Ah Ha!" I knew that I would figure out why your so damn good!" (just kidding)
Hard to generalize. I generally want to keep more than 70% of the potential profit, before I'll consider closing it. Sometimes more than 80%. Depends on how much time remaining on the contract, whether earnings are pending before the contract expires, how deep OTM my cushion is, whether I'm on excessive leverage or not, and so on... For example, If I am really deep otm and not on much margin leverage, and the contract has a 2 more weeks remaining,and I really liked the price and tech support I will probably NOT close it down. But if I was on quite a bit of leverage, and saw another trade I liked, I probably would close it down, to avoid being on even more excessive leverage. Thus I have no particular criteria I use. I evaluate on a case by case basis. <<< I am working my way through the thread >>> You will be reading a lot of the same stuff over and over again.