Which bullish strategy can I use for this view?

Discussion in 'Options' started by PeanutButter108, Feb 3, 2018.

  1. Thanks a lot! Really helped.

    Thanks to everyone else for your feedback as well! Greatly appreciated :)
     
    #11     Feb 16, 2018
  2. I'd watch the moving averages and wait for a crossover before doing anything. It ain't perfect but in my view you're betting going long with options late than early.

    A spread will mitigate much of that time decay risk.
     
    #12     Feb 16, 2018
  3. spindr0

    spindr0

    Since he didn't mention stock ownership, what "spread-em" described is a synthetic long (SELL the $10 put to finance the BUY of the $30 call).

    What you described is collared long stock with the option transactions reversed (SELL call/ BUY put) which is synthetically equal to a bullish vertical spread, which would be the preferential entry in terms of frictional costs.
     
    #13     Feb 18, 2018
  4. ----------------------------------------------------------------------------------------------------------

    I agree with the straddle "but only if"
    1: the Total Debit of the Call + Put does not equal more than a total of $5.00 and you buy
    at least 3-4 months time before option expiration, giving the trade time to play out.
    2: That would give you a +100% profit on the total debit if the stock hits either $30 or $10.

    (Below is the best case scenario)
    If the stock is in a trade range (sideways) moving in repetitive patterns between $10 and $30,
    sell at one end of the range for +100%, and then wait for the stock to move to the other end of the range and sell the other option for +100%.
    "This is why you buy lots of time before expiration."
     
    #14     Feb 18, 2018
    ironchef likes this.
  5. ironchef

    ironchef

    Excellent point.
     
    #15     Feb 18, 2018