Option Buying Strategies (Long Volatility Strategies)
These Strategies to be followed when you expect Big moves or increase in Volatility.
A Thread🧵:
Simple Long Call:
View: Very Bullish
Strike: Can be ATM, ITM or max 1 Strike OTM.
I don't recommend buying deep OTM options, it is pure gambling or Lottery buying.
Reward: Unlimited upside
Risk: Premium paid
POP: Low
Simple Long Put:
View: Very Bearish
Strike: Can be ATM, ITM or max 1 Strike OTM.
I don't recommend buying deep OTM options, it is pure gambling or Lottery buying.
Reward: Unlimited downside
Risk: Premium paid
POP: Low
Simple Long Call:
View: Very Bullish
Strike: Can be ATM, ITM or max 1 Strike OTM.
I don't recommend buying deep OTM options, it is pure gambling or Lottery buying.
Reward: Unlimited
Risk: Premium paid
POP: Low
Call Debit Spread:
View: Bullish
Strike: Should be selected such that max profit is at least 2x of max risk
Reward: Limited
Risk: Limited to the net premium paid
POP: higher than pure call buy
Margin: approx 18k per lot required