Hi guys, in a hypothetical scenario where I think a company will deliver stellar earnings by sometime in the next three earnings report (Q2 or Q3 or Q4), should I be purchasing short dated call spreads and rolling them or just outright purchase call spreads expiring in June 2025?
Long-dated investing with options
byu/Embarrassed-End4105 inoptions
Posted by Embarrassed-End4105
2 Comments
I know it sounds boring but shares are my suggestion. Three quarters out is a life time in options. If a person is a novice so much can go wrong with options. Not much can go wrong with shares.
Are you doing spreads because you don’t want too much theta decay? They also limit your upside if as you say they might have stellar earnings and rip.
Look for stock replacement strategies instead like the zebra (zero extrinsic back ratio spread). Buy two calls ITM, sell one ATM, 100 deltas. If it’s on a meme stock that can’t be margined you’ll pay roughly half of what the equivalent share position would cost. Slight downside protection compared to owning shares outright if the ITM calls gain a bit of extrinsic.