Hey it’s Don,
You're bullish. You want to buy a call.
Which delta do you reach for?
Most traders grab the 80 delta, because it feels safer. And one contract against one contract, they're right. The 80 delta makes more per dollar the stock moves.
But it also costs more. Apples and oranges.
So compare them premium neutral. Same dollars invested.
Now the 40 delta buys you more contracts, and more gamma, for the same money.
That's efficiency. What you pay, against what it can do.
Quick refresher if gamma's fuzzy: it's the rate of change of delta, and it peaks right around at the money. That's where delta moves fastest.
One catch. More contracts is also more theta. More acceleration, more decay.
That's why I check five things before any spread goes on, including the 5-second question the pros ask before every trade. Almost no beginner thinks to ask it before clicking "buy."
All five fit on one page, and it's free today.
Don Kaufman
P.S. Five checks. About sixty seconds. All before you click "buy." Claim my free copy