Why Strike Selection Matters

July 22, 2024 | [Read Online]( [fb]( [fb]( [fb]( [fb](mailto:?subject=Post%20from%20Don%27s%20Trading%20Desk&body=Why%20Strike%20Selection%20Matters%3A%20%0A%0Ahttps%3A%2F%2Fdon-kaufman.beehiiv.com%2Fp%2Fstrike-selection-matters) Nvidia was by far one of the hottest stocks today, gaining 4.8%, and helping the Nasdaq spike by 1.5%. However, it wasn't the only thing moving higher today. Another top performer today was the Trade Desk Inc. (TTD), which surged by 4.6%. Earlier this morning Oppenheimer sent a note to clients which suggested that President Biden's decision not to seek re-election in 2024 is likely to accelerate political advertising spending. The Trade Desk (TTD) is expected to benefit significantly from this trend, with Snap (SNAP) also potentially gaining, though to a lesser extent. Oppenheimer's current forecast for TTD's political ad revenue in 2024 is conservative compared to 2020, but they anticipate revising this upward given the expected increase in overall US political ad spending, which MAGNA, an industry forecaster, projects will grow by 10% compared to 2020. Given the overall bullishness in tech and the positive note, The Trade Desk was off to the races. Let's play a little Monday morning quarterback here, and assume you were bullish on TTD on Friday, and were expecting a big move given how telegraphed Biden's resignation was. Which options contract would have given you the best returns? A.I. Timing Webs: The Future of Trading Unlock Gianni Di Poce's revolutionary A.I. system: - 🚀 Identifies breakout stocks - 💹 Doubled S&P 500 returns in 12 months - 🎯 Spots the "Golden Ticket" for traders Don't miss tomorrow's hot sector! [Learn More Now]( How The Options Market Rewards You If you can nail the timing you will be rewarded the most. For example, if you bought TTD $100 calls that expire in 11 days you would have made 107.8% today. Compare that to the same strike options expiring 25 days from now, which gained 43.6%. If you bought the weekly options expiring this Friday, you would have done even better, as they gained 167.5%. Strike Selection Matters A Lot In the above example we looked out-the-money options, the $100 strike. On Friday the stock closed at $96. Let’s look at the contracts expiring 25 days from now, and see how the call options performed at different strike prices. Deep-In-The-Money: $90 Calls The $90 calls gained 27%...which is significantly better than the stock, and a whole lot cheaper than buying 100 shares. At-The-Money Calls: $97.5 Calls The $96 strike is actually the at-the-money option if you bought these on Friday, however, those have not traded, so we’re using the $97.5 calls instead. Those call options gained 35.8%. Out-The-Money Calls: $100 Calls These call options gained 43.6%. Deep-Out-The-Money Calls: $105 These calls gained 45%. Explosive Trading Opportunities Await! "Professor, I am travelling all over Asia having a blast. I made $435K profit in January with one more trading day left." - Peter P. Las Vegas, NV The Professor has identified 3 new explosive opportunities, but you must act before this Thursday! - 🚀 Potential for massive profits - ⏰ Limited time offer - 💼 Expert guidance from The Professor Don't miss out on these game-changing trades! [Join Now!]( In Summary: • Timing and strike selection are crucial in options trading. • Deep out-of-the-money options can offer high rewards for big moves, but carry higher risk. • Always consider implied volatility - if options are already "juiced" (high IV), consider spread trades instead. • Remember: high reward potential comes with high risk. Out-of-the-money options lose value fastest if the stock doesn't move as expected. • Always balance risk vs. reward in your trading decisions. To your success, Don Kaufman [fb]( [tw]( [ig]( [yt]( Update your email preferences or unsubscribe [here]( © 2024 Don Kaufman - TheoTrade PO Box 24790 Christiansted, Virgin Islands 00824, Virgin Islands, U.S. [Terms of Service](