Toad, I'd like to hear more about your options trades. I've been trading options for awhile now. Similar to you except my time from is usually 2 days - 1 month. Do you look at delta, gamma etc? or do you just make the trade based on what the chart looks like? What kind of spread do you stay away from? oh btw can you guess what my name means
I make the trade based on 18 different criteria for stocks and slightly less for the DJIA index, 12 different criteria for index plays. The criteria is a mixture of things based on the underlying asset and the option. Regarding the greeks, I have a price target on the underlying as well as a stop/loss area and I am simulating the option position before taking the trade to see if the risk and reward matches. If the spread is large it will cause me concerns, something with a spread of 20% I would have to look very closely at. Although, I look at the spread it is a minor consideration. Risk-reward and probability of success are the most critical things for me. You really need to look at the right option to buy closely as that fact alone could affect your end performance by 10% or more.