Are options inherently a short-term trade?

[.sigma]

I use SPY options to swing trade the index on a short term basis and it is very useful. Always remember to buy a spread though, so you limit your downside.

Would that single trade outperform if you traded in smaller time-frames? Lets say you only traded this 300 SPY June 2020 call, and you also traded smaller time-framed trades and managed winners. What I'm trying to figure out is number of occurrences a better deal? The more data the more it tendency centralizes.

And BTW your example assumes going long an ITM call, why not spread it and buy a deep ITM call spread? I'm not speaking solely on going long either. I'm talking about longer time frames in general, it could be a year long credit spread or year long debit spread, a year long naked put or a year long strangle, whatever the strategy it doesn't matter, i'm just wondering if one could trade these strategies in far out contracts in the term structure.

 

[taowave]

Not following your choice of strikes..If you are really convinced you go ATM,but otherwise 1/2 ATR ITM..

That would imply you choose the lower Delta when you have more conviction??

How do you choose your short leg??

Yes, usually 2 weeks out. If I'm really convinced, I'll go ATM but otherwise I'll go about 1/2 ATR ITM.

 

[Wheezooo]

This is how I think about stops btw.

"Exactly! If your stops are getting hit you don't know how to trade. "

You do realize that comment is moronic?

 

[nooby_mcnoob]

"Exactly! If your stops are getting hit you don't know how to trade. "

You do realize that comment is moronic?

Is it?

 

[taowave]

Bid offer spread on 1 year options,let alone spreads is way too wide to trade for a 1 ATR move..

He's a delta trader trying to offset some of the decay...At least that's what I am getting out of this

Would that single trade outperform if you traded in smaller time-frames? Lets say you only traded this 300 SPY June 2020 call, and you also traded smaller time-framed trades and managed winners. What I'm trying to figure out is number of occurrences a better deal? The more data the more it tendency centralizes.

And BTW your example assumes going long an ITM call, why not spread it and buy a deep ITM call spread? I'm not speaking solely on going long either. I'm talking about longer time frames in general, it could be a year long credit spread or year long debit spread, a year long naked put or a year long strangle, whatever the strategy it doesn't matter, i'm just wondering if one could trade these strategies in far out contracts in the term structure.

 

[nooby_mcnoob]

Not following your choice of strikes..If you are really convinced you go ATM,but otherwise 1/2 ATR ITM..

That would imply you choose the lower Delta when you have more conviction??

How do you choose your short leg??

Gut feel. The reason I chose ATM is because I can buy more contracts (I use a fixed dollar amount). What would you do?

Bid offer spread on 1 year options,let alone spreads is way too wide to trade for a 1 ATR move..

Weird I do it profitably. What time frame are you looking at? Edit: ah I see you are talking about a year out. I'm talking two weeks out.

 

[taowave]

Lol....I wasn't about to put it that way,but you are spot on...

"Exactly! If your stops are getting hit you don't know how to trade. "

You do realize that comment is moronic?

 

[Wheezooo]

Is it?

Not certain. Maybe I just didn't' know how to trade.

 

[nooby_mcnoob]

Not certain. Maybe I just didn't' know how to trade.

Well you made a very strong comment so I'd assume you have some logic to back it up

 

[nooby_mcnoob]

Such great traders here I am in the presence of elites.