You should still be demoing these things and reading up.... They won't be in the money until 1120, they only consist of time premium until then. They will be profitable closer to 1120 due to the drop in volatility.
Welcome to wonderful world of VOL....You better learn how it works or you're going to lose a lot more money... BTW, how did the equidistant put option do over the same time frame (what would have happened had you sold the 950 put rather than buy the 1120 call)?
I'm going to assume you paid 17.50 for your call options (1120 June Calls)... Trading around 14 right now, even though the market is about 40 pts higher than when you entered... In hindsight, you could have SOLD the 950 June put for about 20 pts...it's worth 4 or 5 right now... Sounds simple, but of course it's not... Buying options outright is generally a losers game
Bingo! If you're bullish sell put spreads 25-40 days out from expiration. If your bearish sell call spreads 25-40 days out from expiration. If vol is already way low and you see a bearish play but the sold call spreads seem "too close" then use 2-3 month put calenders, or buy a bear put spread ATM or ITM. Rule of thumb: ALWAYS use spreads.... when vol > 30 be in sell mode bullish and bearish .... when vole < 20 .. be in buy mode bullish and bearish. Rule of thumb: ALWAYS be THETA positive. One never knows in regard to timing .. might as well get paid to wait. The Major Commandment: Buying options outright IS GENERALLY A LOSERS game!!!!!
How do I calculate THETA in Interactive brokers for a calendar spread (or other type of spread)? I can only get theta of single options with IB analytics???
Well, VIX options, both puts and calls, increase in price as the market volatility goes up. When the market had its 1000 point intraday drop a few weeks ago, I remember VIX puts (which I happened to be long at the time) actually increased in value during the day. If you want to trade volatility, just trade VXX directly. Keep in mind that it doesn't always move opposite the market, and that it tracks VIX futures, not the actual VIX. A couple days ago,when we had a 1% down day, volatility went down, too, because a day when we only go down 1% is relatively good news.
The Greeks are linear, so just add 'em up. If you have a bull call spread where the long option has theta -0.07 and the short option has theta +0.03 then the net theta is -0.04.
Selling a covered call is one of the best strategies to make mmoney in an up market. Buying an OTM call requires a monster move, as the OP has figured out.