Looking at 5 contracts of the Aug9 NVDA 112 call @ 4.75 for a total cost of 2375 If we have the following outcomes by AUG8 these are the results: 1SD move is 115.64 (@ 3.97) = pnl of -390 (risk reward = 6:-1) 2SD move is 119.03 (@ 7.08) = pnl of 1309 (risk reward = 2:1) 3SD move is 122.72 (@ 11.02) = pnl of 3136 (risk reward = 1:1.3) So basically if we use a 1:1.5 risk reward as a minimum benchmark you pretty much need a 3SD move to maintain that ratio. These calcs are with 10% adj for vol to increase from the current 58% to 68% which is the current IV for the 103 Call which is roughly 10 itm.
If the risk reward sucks for the option buyer, shouldn't it then be awesome for the option seller? So sell the option.
I've looked at fly's and basically a lotto ticket...sure you don't risk much but that shows on the pnl chart. I can't stand spreads of any kind...all they do is suck away profits. Over time I question whether the money you save on spreads will outperform the money you leave on the table.