Call Options ... which to buy ??

The other day I was thinking of buying a Call Option and ...
>What! You always lose money on options!
Yes ... true, but I was thinking about which I would choose ... of a jillion choices I could make.
 So here's my problem: I've identified the stock (example), but I can pick various T = Days to Expiry and various K = Strike Price. I look (for example) at Calls which expire in T = 126 days and see (for example) Figure 1. Should I pay a Premium of C = \$9.30 for a Call with a Strike of K = \$7.50 ... or maybe C = \$3.00 for a Strike of K = \$15.00 ... or maybe ... >Why 126 days ... to expiry? Well, I'll look at other Days to Expiry of course and get another table like Figure 1 and ... >So what's the best choice? That, my friend, is the problem Figure 1
So here's what I think I'll do:

• For each choice of T = Days to Expiry and K = Strike Price I determine the annualized return necessary to make money on that particular option.
• Remember, I have the privilege of buying the stock at the Strike \$K any time before Expiry, but it costs me the premium \$C to buy that privilege.
• That means that, if there are T Days to Expiry and the stock is currently selling at \$S then, in order to make money, the stock price has to increase to at least K + C and that's an increase of (K+S)/S in T days or an annualized return of [(K+C)/S](365/T) - 1.
 >Your total cost is K + C? Well ... if we ignore the commission to buy the option (which is what we'll do since that depends upon the broker). From Figure 1 we'd need the stock to increase (for each choice of option) as in Figure 2. That'd give our Breakeven stock price. >So, what's the best? Okay, for each choice of K = Strike Price we've determined our Breakeven = K + C. Now we calculate (for each K), the annualized return required to achieve that Breakeven stock price ... that's [(K+C)/S](365/T) - 1. Figure 2
>Is that useful?
Funny you should ask. I checked around on some discussion forums and the concensus was that it's meaningless or maybe pointless or maybe misleading or maybe ...
>Yeah, yeah, I get the idea.

In any case, in Excel, this percent would be:

 =((K+S*NORMSDIST((LN(S/K)+(Rf+V^2/2)*T/365)/(V*SQRT(T/365)))-K*EXP(-Rf*T/365)*NORMSDIST((LN(S/K)+(Rf+V^2/2)*T/365)/(V*SQRT(T/365))-V*SQRT(T/365)))/S)^(365/T)-1 where we've used the Black-Scholes premium and K = strike price     S = stock price     T = days to expiry     V = volatility     Rf = risk-free rate
 >What's S again? The current stock price which, for this example, happens to be S = 15.00 so, for example, if I bought the 7.50 option I'd need the stock to increase at the annual rate of: [(K+C)/S](365/T) - 1 = [(7.50+9.30)/15](365/126) - 1         = [16.80/15](365/126) - 1         = 0.389 or 38.9% >Fat chance! Well, there are lots of choices and ... >I assume there's a spreadsheet? Yes. You stick in the current stock price S, a Volatility V (or Standard Deviation, annualized, like 30%) and some Risk-free rate Rf (like 4%) and the spreadsheet calculates the Black-Scholes Premum C for various values of T or various values of K and then computes the required annualized return in order that the stock price achieve breakeven in T days and ... >Examples? Yes >So what'll you buy? I think I'll pass ... >Because you don't know what you're doing, right? Well... uh ... >So, where's the spreadsheet? RIGHT-click here and Save Target to download a ZIPd spreadsheet.
>Haven't you done this before?
Uh ... can't remember.
Wait'll I check:
 site search by: FreeFind
>Okay, what if you sell before expiry. What if you buy a 6 month option now and sell after 3 months? What if ...?
Okay, let's consider that: