This week, we continue this discussion to show why at-the-money (ATM) calls and immediate out-of-the-money (OTM) calls are preferable to ITM calls. With the Nifty Index trading at 19736 ...

Here's a chart ... month ATM naked calls. That said, most of the time SPY will land somewhere between two strikes and a decision must be made to go either slightly ITM or slightly OTM.

ATM options have no intrinsic value, but will still have extrinsic or time value prior to expiration, and may be contrasted with either in the money (ITM) or out of the money (OTM) options.

In-the-money (ITM) options typically have lower time value compared to at-the-money (ATM) or out-of-the-money (OTM) options on the same underlying for the same expiry dates. Is it then optimal to ...