Quick Lesson from My Mentor

When buying options, (a derivative security), buy 10–15 points in the money (ITM). In contrast to buying the strike closest to the underlying’s current market price or OTM. Why? The rate of acceleration will be faster, another way of saying this is that the delta is higher. Yes, your premium may be slightly more expensive but if the market concurs with your opinion, it will lead to greater optimization of your trade’s profitability.

For Example:

Stock XYZ current price is $150.00

I’m Bullish so I’ll buy calls with $135 or a $140 strike

The delta on these ITM calls will be greater than the 150’s

This will allow you to maximize profits of your offensive position

PS: If you’re trading a relatively inexpensive stock let’s say in the 10+20 dollar range, consider going 5 points ITM.

-Kirk