We buy "in the money call options". We also buy "in the money" put options. Calls are when you think something is going up and puts are when you think something is going down.
"In the money" simply means you are on the positive side of the strike price.
The strike price is something you agree upon when you buy the option and so is the expiration date.
Here's a simple example: You know XYZ stock is going up. Maybe not today or tomorrow or this week but everything points to up soon. You "can" buy the stock but that would cost more and eat up valuable buying power. Instead you opt out by buying options. They are cheaper and if done right they are more powerful money makers.
We typically buy "in the money" options with an expiration date 3 to 4 months out.
So the XYZ stock is at $70 and you think it's going to $90, and this month is September. We would buy something like the December or January (this would be the expiration month) $60's. (This would be the strike price)
So the position after you bought would look something like this: (+2 Dec 21 $60C) which just means you bought 2 contracts (equal to 200 shares), the expiration date is Dec 21st, and the C stands for call (which you bought calls not puts)
Instead of buying 200 shares of a $70 stock that puts $14,000 on the line, you opted for 2 bought calls that may only cost $1500 each or $3,000 in total. You can see the leverage being established here.
There are more parameters that go into options trading, but this is just the gist.
REDFLIGHT utilizes options for their partners because it brings the greatest gains for less money.
