Expiration Friday trading

[OptionGuru]

Worst part of Expiration Friday trading is that if you're right, you make good money. If you're wrong, you lose a good deal. Too much risk for me!

Depends on the trade.

• Long Options = If you're right, you make good money. If you're wrong, you lose a small amount of money. The R:R is very good.
  
• Short Options = If you're right, you make a small amount of money. If you're wrong, you lose a good deal. The R:R is very poor.

 

[vanzandt]

Lost 2/3rds on my Aapl shenanigans yesterday.... but it was only 1K.

I sure wish you'd do that ATM strangle for me OG.... I don't have backtesting capabilities. If it were Weds of last week, where would that ATM strangle have predicted AAPL to close Friday? Was it $96.50? If it was, believe you me, I'm gonna get what I need to do it.

 

[OptionGuru]

I sure wish you'd do that ATM strangle for me.

On Sunday evening I'm going to start a thread dedicated to how and why long and short ATM straddles are Dead Money. With a couple live examples on SPY and some other underlying, maybe GOOGL.

Stay tuned.

 

[vanzandt]

Cool. Throw in a sub-chapter about using them as a tool for predicting. And mind you, I know this is is just one tool. Nothing is 100%, but I would be very interested to hear what you have to say about this. I think without major geo-political or geo-economic influences, ie, a dull market, this could be very useful, at least for me and the way I trade.

 

[J_Smith]

Worst part of Expiration Friday trading is that if you're right, you make good money. If you're wrong, you lose a good deal. Too much risk for me!

If you are buying a shit load of cheap options, hoping for a big move, then last Friday would have paid off.

Looking forward to OG's new thread - maybe ET is not that bad after all

J_S

 

[J_Smith]

Been posting some Friday expire charts in the wrong thread - so back we come!

I am short, so if market keeps going up I lose, back down and I win!

J_S

 

[J_Smith]

Here is the SP500 total volume - let's see if the rising prices with lower volume means anything!

J_S

 

[J_Smith]

Update for OI

J_S

 

[J_Smith]

Update for OI

J_S

 

[Sig]

Depends on the trade.

• Long Options = If you're right, you make good money. If you're wrong, you lose a small amount of money. The R:R is very good.
  
• Short Options = If you're right, you make a small amount of money. If you're wrong, you lose a good deal. The R:R is very poor.

Without knowing the probability of the small and large losses you can't know the R:R. For example, let me give you two choices.
1. You have a .00000001% chance of winning $1,000 and a 99.9999999% chance of loosing $10.
2. You have a 99.9999999% chance of winning $10 and a .00000001% of losing $1,000

I'll take option 2 as many times as you'll let me, even though it's a "short options" play per above.