I like to play the same stock's options as long as it is volatile. I usually play front month or next month expiration directional plays (basic calls and puts) when there is at least 3 weeks till expiry. I dont like going any closer to expiry unless I am familiar with how the option prices move in relation to the underlying stocks movement. In cases where the stock moves against me, i will try to turn the trade into a vertical spread.
I try to focus on selling ATM credit spreads with high implied volatility the week of expiration. That way you sell time and collect premium as the options erode.
If the stock is trading flat or in a channel I play butterflys spreads and Iron Condors.
On upward trending long term stocks I sometimes play calendar spreads.
Everyone has thier own style and I basically learned by watching how the option moves in relation to the stock. If you practice for a few months you will begin to see how they trade.
My whole focus is to get as much return as possible in as little time as possible with as little money as possible.
This week I have been playing HD 25 puts. I like to take a core position. When HD dropped the other day I sold them and then bought more when it rose again. Then when HD moved off a bottom and runs up,if I cant sell them for a profit, I turn it into a bull put spread by selling the 27.50 puts. As it climbs, I cover those 27.50s by buying them back cheaper than I sold them. This lowers the cost of owning the 25's and losing value in them as HD climbs, while allowing me to keep a position. If HD drops then they become more valuable, but if HD continues to climb then I continue to sell the 27.50s against the 25's I bought. That is my basic strategy. In every case it is smart to take a profit when you get one because the trade can turn against you if you are greedy.
