OK, if you want directional You can use the butterfly, where you can place at whatever strike and direction you want. Low risk, high profit, You can do directional calendar or diagonal. You can use the ratio back spread, also low cost with unlimited profit. These strategies are much cheaper and better than a straight call or put. You sell option to finance and to buy your option to make profit. All limited risk. You can still win with a range in the correct direction and don't need to be exact. These strategies are not exciting but you have a better chance of winning. With straight call or put, you must be correct in the direction and the underlying must go pass the strike, pass you premium paid break even point before you can make money. You better study them before you trade them.
If you want to help, great. If not, then why are you posting? Please don't reply unless you have something worthwhile to contribute.
Thanks dojiboy and atozcom. I don't intend to test the waters until i've done my homework. Given my inexperience, i want to buy simple puts or calls before trying more complex strategies. Mcmillans book is coming so I'll be busy for awhile.
directional plays in specific directions are very difficult and many think that they generally wont work over a long period of time (ie, you may win in the short term or in stretches, but eventually you will lose over the lifetime of your trading career) Like the other responders stated, it might be better for you to take non-directional plays, understanding that while you are not sure which direction it will go, the underlying will go somewhere. alternatively, if you really want to stick with specific directionals, my suggesting would be to have hedges in place, as in bull spreads to protect against sudden movements in the worng direction, although these strategies kinda suck too, cuz even tho you lose less money and you have lower break even, you also miss out on big money when it explodes in the right direction. Others would also suggest that you keep it simple and if you are truly confident in your ability to predict direction, just go ahead and buy the long position. If you do that, you can either buy 60-90 days out(protect against time decay, but still get decent movement) and keep it for a week or so...or buy the 30 day or less option and keep it for the one day that your crystal ball tells you its going up or down. other than that, ther isnt much else to say....i personally am uncomfortable with all of these (as I do not trust that the market will do exactly what I think it will do greater than 50% of the time and I prefer strategies that are more open to price fluctuations in either direction and that I can predict probability of success at greater than 68%)....anyways, lot of people claim to be good at predicitng direction and you may be one of them...if so, congrats and good luck, hope you do well
just one note: I saw that atozcom wrote about some strategies you can do while I was writing my spiel. Butterflys are a bad idea IMO. It is a bit like playing roulette, pick a number, if you hit it you win big, if not, you lose your money it is "low risk" cuz you only lose what you put in...a low probability play, except in low volatility non-moving stocks. If you predict the stock to go up and you choos a fly, you better hope that it goes up almost exactly as much as you somehow predicted it would, but what are the odds of that? directional calendars and diagonals are pretty good, but they generally require you to make prediction of direction over a larger period of time, and it seemed like you have your predicitions over short periods of time, as you said 1 or 2 times a month...if you have a good idea over a longer period of time, calendars and diagonals would be good for you tho. Sorry for writing so much....good luck