So what do they use in general? and What do you mean "Directional", particularly in trading options? Of the underlying's price?
^ i'm gonna go with yes. "i think ABC will rise" -> long call, bull call spread, bull put spread, etc. "I think ABC will fall" --> long put, bear call spread, pull put spread, etc.
Specifically, they are betting the price of the option they traded. But, the term directional' refers to a play on guessing whether the underlying asset will move higher or lower. Mark
Personally I don't think trading long options (probably except backspreads) is Not a viable way to Most traders for long- or short-term) directional plays. Perhaps just me. Due to such as: High premium, Time value, Precise timing, etc. Example: http://www.collective2.com/cgi-perl...emid=9700583&want=publicdetails&fromoutside=1
Well the most risky ones were in the oil sector: 1-2 day trades with ridiculous percentage returns. I have learned allocation since then.