Which option strategy to use with the following setup ?

[OTM-Options]

..... Suppose you think the SPY will rally 1% in the next 2 days. The ATM SPY March call is about 1.15 right now. So you think the SPY will rally $2, does 1.15 make sense?.......

You just posted a 3x trade.

• At the time of your post (12:16 PM EST) the SPY was trading at $207.17.
• SPY closed at $210.42 today.
• 207.00 SPY March 20 Calls closed at $3.61.
• 207.50 SPY March 20 Calls closed at $3.10.

 

[taowave]

Not sure I agree on this one.
why not trade the 90/115 1x2 assuming
the trade is sufficiently delta long vs a bear ratio spread? Unless you put the bear ratio on for a big credit,how much will you make if you are dead right?

Personally, I see no edge in trading options directionally as opposed the underlying Unless trading the weeklys,punting or when vol is super cheap

I wouldn't recommend a bull call ratio. Volatility will move inversely to the position. A bear put ratio would have a favorable move in volatility.

 

[xandman]

bear put ratio is directionally short, which I recommended for going short because of the likely rise in iv. I didn't recommend the bear call ratio for a long position., but is doable imho. Sorry for the confusion.

 

[Autodidact]

Typically when i go long its because i expect a reaction to the upside, neutrality is not something I can predict.

Based on the above posting, I should keep doing what Ive been doing, buying calls or buying puts at the strike of the designated target.

I wish I could simply buy the shares as sometimes the spread on low volume stocks is extremely unfavorable, but when I do that I lose a great deal in the risk management department.

Thank you all very much for sharing your views.

 

[Teycir]

Weekly debit spreads on ES when RSI14>70 or <30 . 1.5 Month to expiration OTMs on NG when there is divergence between MFI and price. Trade in direction of the trend, wait for pivot points.

 

[taowave]

Weekly debit spreads on ES when RSI14>80 or <20 . 1.5 Month to expiration OTMs on NG when there is divergence between MFI and price. Trade in direction of the trend, wait for pivot points.

I find crossing above 80

 

[taowave]

Apologies,disregard the above..I dont trade the ES,so my testing isnt relevant