If you’re here to profit — not gamble — then knowing why we choose in-the-money options with higher deltas is crucial.
So, let’s break down why I consistently reach for options with a delta around .70 or higher. This choice isn’t arbitrary — it’s about setting ourselves up for a real chance to capture reliable gains, not grabbing a lottery ticket that’ll end up worthless.
The first point to remember is that in-the-money options are already positioned with intrinsic value. This isn’t some theoretical hope for profit based on future moves. Instead, they’re anchored to where the stock is actually trading, which means we’re entering the trade with some value built in.
A .70 or higher delta means these options move roughly $0.70 for every $1 the underlying stock moves, which gives us a direct advantage. When we go deep in the money, we’re making sure our options are responsive to each tick the stock takes, meaning they’re more likely to deliver substantial value when the stock moves in our favor.
This responsiveness is key for the type of trading I do — buying lottery-ticket options with a delta around .20 just doesn’t give you the same level of control or predictability. That’s not why we’re here!
In today’s market, we’re navigating conditions where many people trade out-of-the-money options, thinking they’re getting a “cheap” way to enter. Let me tell you, “cheap” comes with a hidden cost…
Lower-delta options are, by nature, far less likely to make money consistently. They’ll occasionally land a big win, sure — but we’re after steady, repeatable gains.
Think about it this way: When Amazon (AMZN) starts showing some relative strength, if you’re in with an option that’s .70-delta or higher, your position will reflect the move accurately. But if you’re holding an out-of-the-money call, you’re going to see that move pass you by, watching from the sidelines.
I see a lot of people ask why so deep in the money?
The answer is simple: We trade to win, and we want tools that give us a fighting chance every time we step into the market. So if you’re here to move the needle on your profits — not just roll the dice — make sure you’re aiming for a delta in the money and make it work for you.
Roger Scott
Roger Scott Trading
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P.S. Stop Hoping Your Trades Will Go Up and Do This
Ever notice how most trading patterns fall apart the moment market conditions change?
The last five months have proven this painfully true.
Two major pullbacks rattled even the most seasoned traders, sending “tried and true” strategies straight into the trash.
One specific pattern didn’t just survive — it went on a winning streak of 16 straight trades without a single miss.
You see, I’ve traded through every kind of market over the past 30 years, managing hedge fund money and cash for some of the wealthiest families on earth.
But I’ve never seen anything maintain this kind of consistency through such volatile conditions.
That’s Why I Call It the ‘All-Weather Pattern’
The profits and performance shown are not typical, we make no future earnings claims, and you may lose money. From 2/25/20 through 11/7/24,the average win rate on live published trade alerts is 75.2%. The average weighted rate of return on options trades was 6.23% over a 12 day average hold time.
