/biz/ - Business & Finance

Guys what makes more money:
1. Buying options at/near the money for medium cost then it moves in your direction hard.
2. Buying options out of the money for cheap then it moves in your direction hard.
When I think about it assuming SPY at 450 and going to 500 for simplicity sake. Calls at 450 would be worth about 1k two months out and if it went to 500 at a minimum it would be worth 5000 minimum. This sounds terrible getting only a 5x. 10k investment would turn into 50k.

Compare it to calls with a strike of 500, those would still be pretty much useless if it takes the entire duration to reach 500. What would be the sweetspot for out of the money calls? Assuming 30$ out of the money, each call costs 58$. You can buy 172 contracts, if SPY goes to 500 each contract costs 3k. 10k investment turned into 516k! A 50x return.

Has anyone found the sweet spot of how far out of the money to go for max gains? Can't go too far because they can expire worthless, but also can't go too close to the money becausenit gimps your gains. Also, my math might be wrong.

>>53702066
That's a lie, I have a Roth IRA with TDA and while you can't borrow money they give you the other advantages of a margin account like no waiting for settled cash and option spreads (with approval).

>ksh ksh ksh ksh ksh ksh ksh ksh
'Scuse me, fellas. Just taking a dump before the dump.