buying options on expiration day

Quote from BoneFishGA:

Why do people go long options with one day left to expiration? What is the advantage or strategy behind this?
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It's just like buying options at any other time, But, with time short, the option prices are inexpensive in terms of dollar cost. With the explosive markets of recent months, these buyers are hoping the final hour of trading will move the market by 2-3% - moving the option into the money.

Mark
 
Quote from BoneFishGA:

Why do people go long options with one day left to expiration? What is the advantage or strategy behind this?
More...


The better question is this: Why do intraday traders even touch underlyings on options exp. day when you can have a built in stop loss for so cheap ?
 
covering shorts. say you're short an option you sold for $1 and it's one day to expiry with the option trading at $.05 and is nominally out of the money. You may be better served covering than letting expire as this market is all over the place.
 
Thanks for the replies.
I didn't think about all that. When I have about a week or so left I get nervous I won't be able to get out and sell to close my position.
The reason I asked this question, yesterday I saw a guy talking about buying USO Dec calls for a day trade and I thought who would buy these things back at the end of the day. But I hadn't thought about sellers closing positions, etc.
So I guess if they are some of the more actively traded options its not a problem?
 
Options are designed to make insider trading more profitable. Imagine how rich someone could get trading insider info made public just before options expiration. I'm sure someone has done this.
 
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