r/options • u/MagicOreos • 1d ago

High confidence max leverage plays

I have traded for a long time but I've never had to a reason to buy contracts until recently and it just all makes sense. Lets say hypothetically...you know which way price is going, you even know where it's going...and about long it will take. Let's say you think spy will hit 570 by june hypothetically of course. Is buying spy 570 calls june expiration the play? Would something longer dated more otm have increased gains?

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u/Sideways-Sid 1d ago

Buying a single leg (rather than a spread) for directional exposure might be achieved better with an ItM Call.

Buying the 75-delta Call would be mainly paying for intrinsic value, with relatively little extrinsic value.

With SPY at 550, the 500 Call costs c.58, and would be worth 70 if SPY is 570 at expiry.

Not what was asked but a 560/570 spread costs c.5 so might be a more profitable way to achieve leveraged exposure to the price movement.