If I think a stock is going from $25 to $35 overnight...

[Crude Man]

What is the best option trade?

 

[atticus]

Generally, the midpoint calls. In this case, the front-month 30C.

 

[zdreg]

call your lawyer before the SEC calls you.

 

[nLepwa]

Quote from zdreg:

call your lawyer before the SEC calls you.

Haha

Especially if you cashed out on the front-month call

Ninna

 

[spindr0]

Quote from atticus:

Generally, the midpoint calls. In this case, the front-month 30C.

Ditto this but if time until expiration was short, it could be the 27.5 call if it existed.

Another way to look at it would be the lowest near month strike OTM call that is available for .05 cents.

 

[Crude Man]

I knew I'd get a SEC reference.

I just wanted to learn how to win big in the bio techs before FDA approvals.

Thanks.

 

[ForexForex]

Quote from Crude Man:

I knew I'd get a SEC reference.

I just wanted to learn how to win big in the bio techs before FDA approvals.

Thanks.

A straddle might be the best way to go.

 

[ramaTrade]

Quote from Crude Man:

What is the best option trade?

If very close exp. bull call spread.
If far from exp, OTM calls.

 

[nazzdack]

Quote from Crude Man:
----learn how to win big in the bio techs before FDA approvals.

1) The option premiums and option skew will tend to be too inflated to do anything. You have to be spread-off to conserve your trading account.
2) If the put option premiums become larger than their strike price, then you may be able to lock-in some "free money".

 

[spindr0]

Quote from Crude Man:

I just wanted to learn how to win big in the bio techs before FDA approvals.

You win big by getting the direction right