We often use options to carry out a directional bias that we have in a certain market in lieu of taking a position in the underlying stock or futures product. This usually affords us a slightly betterthan the 50/50 shot that goes along with a long or short stock position. Today, Tom and Tony take a look into what time frames might be most beneficial when taking these directional plays to the options market, with the primary strategy today being .The Study
- SPY, 2005 to Present
- Sold 30/10 Put and Call Spreads
- Compared 15, 45, and 75 DTE options
While we saw that the shortest-term option showed the greatest per day results, the average P/L on the whole was so small that the reward does not seem worth the potential risk. Tom concludes that our 45 DTE go-to is still the optimal. Check out the segment above for greater detail.