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tst again

QUESTION: I'd like to know about the Value Factor. If you buy an option with a Value Factor over 1.95 and the commodity goes against you, you'll lose more money than if you bought a cheaper option. So, here's the question: Which is better; buy two options for $500 each or one option for $1000 with a higher Value Factor? And if you say to buy the $1000 option, please state why. Thanks Kawsu.

ANSWER: This is a great question, and one we hear quite often. TOVI’s answer to this question is formed by TOVI’s “theoretical bias” when it comes to selecting options: The more time the better; and, the closer to the strike price of the underlying futures market the better. Accordingly, if it is within your trading budget TOVI believes it is better if you purchase the option with a significantly better Value Factor, and one with a Value Factor of at least 1.95.