If you think a stock is bullish, here are some ways to get into the trade:
1) Buying a stock (Stock Down - Lose money; Stock Sideways - no money; Stock Up - Make money)
2) Selling a CSP (Stock Down - Lose lesser money; Stock Sideways - Make money; Stock Up - Make lesser money)
3) Selling a Put Spread (Down - Lose All Money; Sideway - Make some money; Up - Make All Money)
4) Buying an OTM Call (Down - Lose All Money; Sideways - Lose All Money; Up - Make Lots of Money)
I am a big fan of option #2. There are many people that make money through #4 (buying an OTM call) but I am not good at it. When you buy an OTM long call, you have to get two things right. Price & Time. Please keep this in mind when you buy OTM calls. Personally I am not good at it.
2) Selling a CSP (Stock Down - Lose lesser money; Stock Sideways - Make money; Stock Up - Make lesser money)
3) Selling a Put Spread (Down - Lose All Money; Sideway - Make some money; Up - Make All Money)
4) Buying an OTM Call (Down - Lose All Money; Sideways - Lose All Money; Up - Make Lots of Money)
I am a big fan of option #2. There are many people that make money through #4 (buying an OTM call) but I am not good at it. When you buy an OTM long call, you have to get two things right. Price & Time. Please keep this in mind when you buy OTM calls. Personally I am not good at it.
[12:32 PM]
And if you buy OTM puts or calls just before earnings, the premium gets crushed immediately after the earnings. For example, stock is 100, if you buy a put for $2 and a call for $2, then stock goes up, you won't make any money at least until stock crosses 104.
