Best options strategy to avoid time decay?
- Thread starter yalag
- Start date
A dozen or so replies and the OP hasn't said a word.
Similar to the other threads he's opened up....
Similar to the other threads he's opened up....
Roll or sell your long options within 30-90 days of expiration.
With options that far out, you are more likely to get damaged by a drop in volatility or large change in the share price.
$3.00 b/a spread on DITM options that expire in two years, a $600.00 stock with a daily range of well above $3.00. OP wants to avoid time decay.
Not sheer genius, just Options 101 and better than your solution.
Quote from ForexForex:
$3.00 b/a spread on DITM options that expire in two years, a $600.00 stock with a daily range of well above $3.00. OP wants to avoid time decay.
Not sheer genius, just Options 101 and better than your solution.
Get a margin account and you're only coughing up 30k. I can't see any advantage of such DITM calls... unless you think there is a probability of a crash in the stock price.
You can avoid time decay with a synthetic long, but probably not what OP had in mind.
Sell the 275 strike put. Then your outlay is only 27,500 bucks.
2.9% return over 669 days.
2.9% return over 669 days.
Only on ET is it possible for a bad suggestion to be better than no suggestion.Quote from ForexForex:
$3.00 b/a spread on DITM options that expire in two years, a $600.00 stock with a daily range of well above $3.00. OP wants to avoid time decay.
Not sheer genius, just Options 101 and better than your solution.
I understand that there is no free lunch. Sorry for the lack of reply but I was away for a couple of days. Here are my options it seems (suppose I have 100k to invest) for 1 year bull AAPL.
(1) DITM calls 2013. For example, Jan 2013 300 calls are going for 306.00. This would have very little time decay and it's slightly better than just the stock because I can double the acquisition.
(2) Calendar spread. So I can purchase Jan 2013 600 for 71.04 and write April 2012 670 for 3.75. I suppose this has more of a time decay than (1) but I'm gaining it back over time if all my writes expire each month?
(3) Margin account. I can just open a margin account with the 100k and essentially double the acquisition anyway with no time decay?
(4) Write OTM puts 2013? So I suppose I can write Jan 2013 400, and with 100k cash I can only write 250 @ 9.90 each which = $2500. So if by then the stock is above 400 I pocket $2500. I don't think this is capturing my bull intention very well?
So I'm very confused, why should I bother with all this options play when the margin account provides roughly the same amount of leverage and less to manage?
(1) DITM calls 2013. For example, Jan 2013 300 calls are going for 306.00. This would have very little time decay and it's slightly better than just the stock because I can double the acquisition.
(2) Calendar spread. So I can purchase Jan 2013 600 for 71.04 and write April 2012 670 for 3.75. I suppose this has more of a time decay than (1) but I'm gaining it back over time if all my writes expire each month?
(3) Margin account. I can just open a margin account with the 100k and essentially double the acquisition anyway with no time decay?
(4) Write OTM puts 2013? So I suppose I can write Jan 2013 400, and with 100k cash I can only write 250 @ 9.90 each which = $2500. So if by then the stock is above 400 I pocket $2500. I don't think this is capturing my bull intention very well?
So I'm very confused, why should I bother with all this options play when the margin account provides roughly the same amount of leverage and less to manage?