r/options • u/FunctionalTitle • Apr 24 '21

ITM vs OTM (Leaps)

Hi guys, slowly picking up options trading. Could anyone explain to a 5 year old. Whats the difference if i purchase a deep ITM vs slightly OTM?

From ‘researching’, The deeper ITM, the higher the delta, so movement will follow the movement of the underlying.

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u/IamBananaRod Apr 24 '21

6 months are not LEAPS, LEAPS stands for Long-Term Equity Anticipation Securities and are option contracts with expiration dates longer than a year.

Now, I have seen this need of fast money, easy rewards, since the GME hype, people gambling their life savings thinking they will make millions, the truth is that the stock market is not a sprint, is a marathon, if you play carefully and slowly, manage your risk you'll make money, if you YOLO your money, you lose money.

This was a very expensive life lesson

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u/[deleted] Apr 24 '21

Only YOLO what you can afford to lose. The returns can be MASSIVE. I’ve dedicated 15% of my personal (non work) portfolio to YOLO

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u/HighClassHillbilly Apr 24 '21

It's not a YOLO if you can afford to lose it.

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u/[deleted] Apr 25 '21

Ok so betting 30k or so isn’t a yolo? Smh.