Trading Strategies With Out-of-the-Money Options

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When trading out-of-the-money futures options, you should have defined trading expectations. You should expect most of your trades to be losers, but make a lot of money on a small percentage of trades. This is just the opposite of using an option selling strategy, where you expect to make money on most of your trades and guard against taking a huge loss on the inevitable trades that moves strongly against you.
Some professional traders who buy out-of-the-money options strongly guard against losing time value. Therefore, if the market doesn’t move in their favor quickly, they exit the positions. This way, there is still limited risk with a lot of leverage.
Also realize that commissions will be a bigger percentage of the option value when you buy out-of-the-money futures options, because they are priced lower than-in-the-money options. This can be very costly if you are paying higher full service rates