Options Trading Professional Explains - How To Choose The Best Option Strike Price

How to choose the best strike price!

If you're bullish and want to buy a call option, how do you choose the best strike?

Lots of choices - in-the-money, at-the-money, out-of-the-money.

Which expiration?

And most importantly - how far and how fast will the stock reach your desired level?

All of these things are very hard to figure out, so that's why this video will help ease some of those decisions.

Come watch!

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[christopherfromme]

It was only a paper trade since my real account will not let me buy calls but bought 5 AAPL calls the day before earnings and made a $5000 paper profit and the Delta was about .80

[quantum]

@Lee Lowell Thank you for sharing your knowledge. It is important to trade quality names. In addition, when I have traded options on low quality penny stocks that didn't move more than $1-dollar have caused my P/L to suffer, but high quality names often have larger price swings, and when spot-price moved $2 or $3 because change in spot price gets squared - $1^2--> $1, $2^2 --->$4....
👍

[DougSmileyVirgo]

AAPL has an IV30% rank of 9%. I remember Lee had a video of choosing stocks that had at least an IV30% rank of 25-30%. LIkewise, if you are buying options you should consider .25 - .30 Deltas for optimum PnL.

[allyvyne]

Some traders buy 10 contracts at .20 OTM for $200 premium. Why not buy 1 contract ATM for $200 premium? Or 2 contracts 1.00 totaling $200 premium? Which one would you select?

[skyhawk]

Great video Lee, and again I learned a few things that I dit'n learn somwherelse, THANKS.🙂

[librisc]

Lee, how about a video about selling options with a higher delts let's say between .3-.4 or even higher and closing out early due to 15, 20, 30% moves in a day or 2 or 3 etc....i've done that few times and came out making nice profits if you catch some bottoms. In other words, instead of staying the entire amount of time to expiration, you set buy to close signals early where % of probability is really high. then rinse a repeat several times in a day sometimes. It is somewhat time consuming but it's making the profits. just a thought. I appreciate you. Because of you i ;pulled the trigger on selling options back in the fall of last year.

[RedNoseGETEM]

Its going to get very interesting if the market goes up leading into June-July. HEAVILY weighted Inflection Point waiting up there 👀

[benrashid]

Nice video. Maybe you address this in another video, but what about when you have deep in the money calls on an option but there is not much volume for that strike? And let's say it is expiring in a few days? In another video you recommend buying deep in the money calls with around a 6 months time frame but if the stock moves up quite a lot, will you still be able to easily sell your (by now) very deep in the money call easily as expiration approaches?

[harshs]

How about buying a DITM 90 delta 1 year LEAP on AAPL and sell OTM 30DTE calls on it?

[NutanPagadala]

your definition of delta is wrong. please correct it

[registrationhater]

Might even fall off a cliff despite a strong uptrend. Just had 3 stocks (DITM trade) with strong upward momentum turn on a dime and loose all their value