I love expiration week as I believe options were made to sell ha ha.Let's get some ideas going. Where are the high probability trades, where is that fat theta? Personally, I've had my eye on LVS'premium (sold the feb atm put vertical) and as always, I love shorting AApl vol intaday while watching the pivots for hedging points (although that did not work out well today). Lets get the idea mill going.
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Expiration week trades, let's hear 'em
- Thread starter tradermike79
- Start date
Quote from tradermike79:
I love expiration week as I believe options were made to sell ha ha.Let's get some ideas going. Where are the high probability trades, where is that fat theta? Personally, I've had my eye on LVS'premium (sold the feb atm put vertical) and as always, I love shorting AApl vol intaday while watching the pivots for hedging points (although that did not work out well today). Lets get the idea mill going.
Low premium, high risk, less time to "GET ME OUT!"
Quote from MathAndLogic:
Low premium, high risk, less time to "GET ME OUT!"
If options are priced fairly, then it shouldn't make any difference in the absence of an extra, not-priced-in information, right? Fast premium decay (percentage-wise) is cancelled by the low absolute values of premiums compared with the risk taken. So, over time (i.e. many expiration weeks) or with an uncorrelated basket of underlyings (individual equities might be better than indices, which are apparently correlated), it should not be better or worse than any other time period. Could you critique this line of thinking please? Thanks.
GOOG butterflies all the way. You have to keep a tight leash and cut the losses, but you've got a decent chance of turning $2-4 into about 9.50
Quote from Neutral:
If options are priced fairly, then it shouldn't make any difference in the absence of an extra, not-priced-in information, right? Fast premium decay (percentage-wise) is cancelled by the low absolute values of premiums compared with the risk taken. So, over time (i.e. many expiration weeks) or with an uncorrelated basket of underlyings (individual equities might be better than indices, which are apparently correlated), it should not be better or worse than any other time period. Could you critique this line of thinking please? Thanks.
Yes, years of heavy gains during expiration week. What you said makes sense, however after going short every expiration day, and week, for over four years, I will say that options are often too expensive during expiration week. Especially the OTMs. So, my conclusion is that options are seldom priced fairly and many times over priced on expiration day (especially near the close). You just have to look for those fat tails or people trying to dump their shorts while rolling them into next month etc...
Quote from Neutral:
If options are priced fairly, then it shouldn't make any difference in the absence of an extra, not-priced-in information, right? Fast premium decay (percentage-wise) is cancelled by the low absolute values of premiums compared with the risk taken. So, over time (i.e. many expiration weeks) or with an uncorrelated basket of underlyings (individual equities might be better than indices, which are apparently correlated), it should not be better or worse than any other time period. Could you critique this line of thinking please? Thanks.
overall, these things are made to sell. If you know how to manage your risk, I am willing to be net options sellers have done better than long gamma traders over the past 30 years.
I have been playing aapl strangles short the past few day, into the 195-210 today. i have been using the pivots for adjustment/exit points. generally, instead of adjusting with shares, I will use more options to even out my deltas until about noon. At that point I am forced to either use shares to adjust or begin exiting out of my losing leg because the theta is no longer there.
Quote from tradermike79:
overall, these things are made to sell. If you know how to manage your risk, I am willing to be net options sellers have done better than long gamma traders over the past 30 years.
I would be willing to bet they've done almost exactly equal over 30 years. LOL
There is no edge in being a buyer or a seller in options, this has been discussed to death on this forum.