Best option strategy ?

Quote from cohenmichaela:

I agree buy to OTM calls but why use back-month? Back-month has a flatter gamma curvature and will accumulate less deltas on those calls. They're also more sensitive to vega as IV_Trader mentioned.


I believe when majorursa said far month he meant the second/third month out and not the back months. The OP said the movement happens within the next 60 days, therefore the "far" month out options(the first cycle that captures the next 60 days) would better capture the move if one is to occur past the current expiration date. Since we do not know the exact price path over the next 60 days, buying front month gamma two/three times can prove to be a waste. Surely, its more of a vega play the farther out we go but the OP doesnt know exactly when it will happen as per his original post.

If vols are favorable, i'd lean towards the sell ATM put/buy OTM put play.

Just my 2 cents.
 
Back
Top