How to Choose a Strike: How Far From Spot Is Right?
Choosing a strike is really one question: how much are you willing to pay for this option, and how far does spot have to move before you break even? The further a strike sits from spot, the cheaper its premium; the closer it sits, the more expensive. The simulator's chain marks each strike's distance from spot next to it, and the ATM row just says ATM; the strike dropdown in the order ticket also labels each strike in-, at-, or out-of-the-money. Check the distance first, then work out your breakeven.
Read the distance labels on the chain first
The +25 or −25 next to a strike is the strike minus spot, in whole points: +25 means the strike sits 25 points above spot, −25 means 25 points below.
The ATM row only shows ATM, with no distance number: the strike nearest to spot is at-the-money.
An example: with spot around 7,400, the 7,450 strike shows +50 and the 7,350 strike shows −50. (All numbers below are examples only, not live quotes.)
Distances move with spot: as spot moves, every strike's distance changes, so check the latest numbers before you place an order.
Further away means cheaper premium — and a longer road to breakeven
For the same expiry and direction, the further out-of-the-money a strike is, the cheaper its premium: because it is less likely to end up in-the-money.
Closer to the money costs more; in-the-money strikes cost the most: because they already carry intrinsic value.
Cheap does not mean a bargain: a deep out-of-the-money option is cheap, but spot has to travel a long way before you break even; if it is still out-of-the-money at expiry, it expires worthless.
A buyer's breakeven: for a call, roughly the strike + the premium + your share of the fees at expiry; for a put, roughly the strike − the premium − your share of the fees. Example: with spot around 7,400, you buy 1 contract of the 7,450 call for a $2.00 premium, and a round trip costs $1.30 in fees — $0.013 per point — so breakeven is about 7,452.01: spot has to rise about 52 points before you break even. (Numbers are examples only.)
One more example, for a put: you buy 1 contract of the 7,350 put for a $2.00 premium, and breakeven is about 7,347.99: spot has to fall about 52 points before you break even. (Numbers are examples only.)
Buyers and sellers read distance differently
Buyers: you pay a premium to buy direction. Further away is cheaper, but spot has to move further before you break even; closer is more expensive, but the price moves with spot right away.
Sellers: you collect a premium and give up direction. Further away collects less, but spot has to travel further before the trade loses past the margin held; selling locks up margin (a simplified simulated rule at 20% of the strike) — it is not just about how much premium you collected.
No strike is "best": distance is just a trade-off between paying less and breaking even more easily — no single strike is right for everyone.
0DTE expires the same day: however far away a strike is, if it is still out-of-the-money at expiry it expires worthless; no new positions after 15:30, and the simulator reminds you to close out before 15:55 — do not leave the distance question until the last minute.
How to practice in the simulator
Start with 1 long single-leg contract near the money: see what the premium is and how far breakeven sits from spot.
Compare two distances in the same direction: for example, the 7,400 at-the-money strike and the 7,450 out-of-the-money strike — see how much the premium and the breakeven differ.
Write your exit plan before you place the order: the take-profit and stop-loss percentages are calculated on the capital you put in — do not look at the strike alone.
When you review, check the trade log: how far from spot this strike was, how far spot moved before you broke even, and how much fees took in total.
This simulator uses real CBOE option chains delayed about 15 minutes, starts with $10,000 in virtual funds, charges $0.65 per contract per side in fees, and shows P&L net of fees; short-sale margin is a simplified simulated rule at 20% of the strike, not a real broker margin. The simulator is for practicing orders, discipline, and review. It is not investment advice and promises no returns.