In The Money Calls, will Chris Rowes put system work in reverse
I read Chris Rowes article on "Why 'In-The-Money' Puts are Not as Risky as Shorting Stock". Why won't this concept work for going long. ie buy "In-The-Money Calls. You would only be putting up a small amount as oposed to actually buying the stock. You would need to use the same perameters as to time value and intrinsic value.
Don Malman
Answers
2183 points
ChaosNantuko answered one year ago …
Simply put, it does, and people do it all the time. That being said, I feel you can get better results by using the technique he outlined here: http://tycoonreport.tycoonresearch.com/articles/650929881/want-to-increase-your-odds-of-success-enormously
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314 points
Ifly answered one year ago …
If you want to trade options you need to understand the "greeks"
One of those is gamma. Understanding that will show you that trading Out of the money puts and calls give you more 'bang for your buck' than ITM options. Gamma is the acceleration of the delta. Delta is a measure of how much money your option will make/lose for every $1 move in the stock. An ITM option due to its position on the gamma curve will make money slower and lose money quicker than an OTM option.
Education is the key to successfull option trading.
Happy trading
Ifly
