Not exact matches
Instead of buying the underlying stocks, I choose deep in the market (
ITM) call options with
high intrinsic value.
It is the
highest because it is barely
ITM.
An
ITM binary has a much
higher probability of profiting due to the market already being beyond the strike.
In the money (
ITM) are the strikes priced
higher because the statement is already true.
Should the stocks go up and get called away, the «if called» returns would be much
higher (likewise, should the stocks drop, there is less downside protection in these out - of - the - money options compared to their ATM and
ITM counterparts).
If
ITM line moves so that strike price is more profitable for us then 95 % profit can move for example to 24 %, but this also moves yields
higher probability of profit.