Any of You Day Trade Options Near Expiration?

zghorner

zghorner

I am talking about buying, not shorting, highly liquid options near or on expiration day. Just curious where this lies between common and taboo. ATM options have crazy volatility close to expiration...i know volatility is a good thing in short term trading so the question popped into my mind.

I dont see this being mentioned much which makes me think it is avoided for a good reason...Do the price swings happen too fast making it too hard to manage risk?

Please enlighten me.
 
16years back, last day, find a stock say price 49.5 buy some calls at like 30cents and a move to 52 ie 4% area gets a huge 1 day profit, likely breaking even over all on this.
 
Turveyd said:
16years back, last day, find a stock say price 49.5 buy some calls at like 30cents and a move to 52 ie 4% area gets a huge 1 day profit, likely breaking even over all on this.
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Yeah, I would not suggest this method. The amount you pay for time value is unreasonable.
 
It's not a change in the price swings of the underlying that makes it difficult, but the price swings of the options themselves. All their components become super steroid and they turn into these giant short term bets with magnified outcomes.
I personally did what I can to reduce my positions about 10 days prior to expry, but I knew plenty of people that loved trading one day options. So nothing inherently wrong with doing so, maybe even easier for you since you'd be looking at them as pure bets, which is what they are, with so little time left.
 
Wheezooo said:
It's not a change in the price swings of the underlying that makes it difficult, but the price swings of the options themselves. All their components become super steroid and they turn into these giant short term bets with magnified outcomes.
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Truer words have never been said! I've traded low-delta Iron Condors in 0-day $SPXW.X, and it's a wild-ass ride. Thetas and gammas in the thousand-plus range are "fun" to see, especially when the price is close to one of your short positions... if you're short on adrenaline, that's the position to take.

If you're going to trade $SPXW.X, I'd suggest getting familiar with the movement patterns in it - the lunchtime slowdown and the 90-second crackmonkey scramble just before the close. That damn thing's got a switchblade, and it'll cut you three ways - deep, wide, and often - if you go in naive and clueless.
 
BlueWaterSailor said:
...the lunchtime slowdown and the 90-second crackmonkey scramble just before the close. That damn thing's got a switchblade, and it'll cut you three ways - deep, wide, and often - if you go in naive and clueless.
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So you options freaks are what cause that "before-close" scramble. I knew it! I so hate options, they are totally Crazy Eddie...

Speaking of which, we are nearing X-mas again!

Here's options during the X-Mas holiday...

 
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