Using Options to Trade TSM Stocks ... Jeremy L.

I am interested to trade the nightly RSI 2-based TSM pick with long options and wonder what you think is the best selection ?

I have always approached long options with a relatively deep ITM option at least 60 days out. However, for a trading style with an average hold of only a few days and a high winning %, would you think that ATM and around 14 - 34 days to expiration might be best ?

Best regards,

J.

..........

I would use deep in the money calls (delta > 0.9) with at least 15 days to expiration (e.g., today, I would buy
Feb calls). Deep ITM calls will trade like the stock itself. You only run a risk of not getting an exit (RSI(2) >80)
before expiration.

Ric Miller, Ph.D.
6-Sigma, Master Black Belt