DATE: March 14, 2002
How would you determine the most appropriate strike price for a stock that you wish to purchase an option or LEAPS for?
Just as there is no way to tell which stock to buy, there is no scientific method of determining which option to purchase. Investing and trading is an art, not a science. Selection of option strike price and expiration date are decisions that every option user must make individually. Generally, longer-term options cost more than shorter-term options, and, generally, out-of-the-money options cost less than at- or in-the-money options. There is always a trade-off, and that is one aspect that makes option trading different than stock trading.
Trade options, stocks, futures + forex on a single platform. thinkorswim by TD Ameritrade.
OPTIONS+ is the new mobile options calculator for iPhone users. Download it today.
Get up to $500. Trade commission free for 90 days. Free tools for advanced traders.
Commission Free Trades. Get up to $500 - trade commission free for 90 days & advanced tools.
Download CBOE's new iOS app featuring detailed quotes & option chains, CBOETV, interactive courses, and more.