If you have an opinion that a stock is going to move a certain amount over a certain time horizon, how do you decide what option is the best one to trade?
I can't reply, because I'm not allowed, but other will. Give a specific example with a current stock and what your expectation are.
The more confident you are the further OTM you go and use a closer expiry. The less confident you are, reign in one or both. Either get closer to ATM and/or kick your expiry out. But it all depends on confidence or how strong your opinion is. You will be better able to gauge your confidence with experience which comes with hundreds of positions. If you haven't executed many positions be weary of naive confidence. Live to trade another day.
Good confidence - a ratio spread. Depends a lot on your concern about it going above you expected top.
Since you are bullish. Use a synthetic long, sell close to the money put and use the premium to buy call. The ratio is up to you, 1-to-1 otm should work for starters. Use different months, sell put further month for more premium. Modify as you see fit.
It's simple. You either bet up or down; buy the call or put option, buy at the money, I'm a simple guy...I do basic/simple option strategies. I hate those weird/complex one's....for people who can't decide and just sit on the fence and have no conviction (or backbone),
Sell the option which insures the opposite direction. You will bring in cash whether or not you are correct; if you sell a spread, you will have defined a limited risk. I'd make/fill-in 5 outcomes: 1) up 10% 2) up 5% 3) 0% movement 4) down 5% 5) down 10% If you draw this out with a standard "PnL" graph, you'll answer your own question.
The first thing you have to ask yourself is whether you should actually use options for your strategy. It appears that the only parameter you have an opinion on is direction which would make me think that a straight stock purchase would be the adequate instrument to use. When you use options some other factors come into play such as time (options expire), volatility, volatility skew/term structure, etc. If you have no opinion on some (or all) of these then it would be difficult to establish an option strategy that would take advantage of its inherent reward for the risks that you will take. If all you want is the leverage that options provide I would do what lylec305 suggested and do a synthetic long (buy call-sell put @same strike). Most people assume that for leverage you simply buy a call (long) or sell a put (short) but even though you would be using leverage and even an acceleration kicker (gamma/convexity) you'd be paying for it with time decay and if you are correct about the direction but it happens too late you might lose money even if your opinion was correct. TL/DR learn about options, then determine whether they are a good fit for your trading style