Question: What’s everyone’s opinion of vertical call spreads vs straight puts? I realize this is a very open ended question.

Cormac Butterly: I prefer put spreads because I’m paying less extrinsic value and as a result I suffer less from time decay. With puts (depending on time frame) you need the move in the underlying to happen quicker because every day it stays still or moves away from your put it is costing you a lot in time decay.

Cormac Butterly: Very simple long puts have greater negative theta than long put spreads. I buy long put spreads all the time in uvxy because they have lower negative theta than straight puts when the spread is out of the money.

Cormac Butterly: Long options are a decaying asset and hence why many people prefer to sell the premium rather than buy it. Of course this depends on the level of implied volatility. If iv is very low it may not make sense to sell premium as you are essentially selling it at a discount.

Michael Listman: With Put spreads you’re essentially only able to collect the difference in extrinsic value whereas with a long Put you can have an unlimited run. I mainly put on the spreads though 9 times out of 10, the ROI for my short Put is greater than that of my long Put. That said I generally opt for the ‘known’ profit potential of the spreads except in the case of larger spikes. This all assumes you get direction right.