Strategy: Sell n Calls, Expire ≤ 56 DTE
Buy n Calls, Lower Strike, One Expiry Later
Price Chart: Uptrending
Current IV%: ≥ 20%
IV Rank: ≥ 30
Trade: Buy n call options, one expiration later; sell n call options, higher strike.
Typical Strike Deltas:
Long Call ≈ 0.55 to 0.45, one expiration later
Short Call ≤ −0.25
Goals: Strong price rally that moves long calls ITM for profit; OTM short calls used to reduce entry cost.
Manage: If possible, roll short calls once. Otherwise, close the trade or let it expire worthless.
Profit: Close when profit is at or more than 30 percent.
Loss: Close for an 8 percent loss.