OEX weekly options

kalikahuna · Jul 1, 2006

Has anyone tried trading OEX weekly options?

kalikahuna · Jul 1, 2006

also....what strategies are used for these 1 week long options?

MTE · Jul 1, 2006

Weeklys are Gamma options. Pure gamma plays.

momoneythansens · Jul 1, 2006

http://www.elitetrader.com/vb/showthread.php?s=&threadid=69102

ET Search is your friend

kalikahuna · Jul 1, 2006

MTE and Mo Money....you guys rock...always a wealth of info and advice.

vedanta · Jul 3, 2006

Quote from MTE:

Weeklys are Gamma options. Pure gamma plays.

I donot know anything about greeks. What is meant by pure gama plays.

I sell spreads on weekly ESTX50 and try to br out of the money as much as possible. In that context what is pure gama plays?

Thanks

MTE · Jul 3, 2006

Quote from vedanta:

I donot know anything about greeks. What is meant by pure gama plays.

I sell spreads on weekly ESTX50 and try to br out of the money as much as possible. In that context what is pure gama plays?

Thanks

In simple terms, it means that options are the most sensitive in the last week so relatively small changes in the underlying can translate into big profits/losses.

In the context of selling spreads with 1 week to expiry - the trade off for you is that in the last week time decay is enormous, but at the same time, options are very sensitive to changes in the price of underlying.

Aardvark · Jul 3, 2006

I have yet to find a "comfortable" way to play the weekly's (SPX) When they first came out I tried a credit spread and while it went OK I did worry about getting out of it because of low volume. Last month decided a better way was directional debt spreads and won (fairly big) on one of them and lost small on the other. However it was pretty much just pure luck. I never felt good about either trade. I suppose you might be able to play the volatility if we continue jumping up and down. Someone did say they had good success doing an IC but that was some time ago and don't think in a high volatility environment it will work given the distance between the spreads...perhaps the OEX would be better/easier than SPX.

If anyone has good success I'm sure they'll be happy to share

vedanta · Jul 3, 2006

Quote from MTE:

In simple terms, it means that options are the most sensitive in the last week so relatively small changes in the underlying can translate into big profits/losses.

In the context of selling spreads with 1 week to expiry - the trade off for you is that in the last week time decay is enormous, but at the same time, options are very sensitive to changes in the price of underlying.

Thanks MTE for your reply

Is there any income options strategy where margin requirement will not fluctuate very much? In a falling market I have seen my positions are still out of the money,it is the margin call that forces me to take losses.

kalikahuna · Jul 3, 2006

I'm trying some virtual trades for various spreads on SPX and it seems they wont get filled cuz of low open interest.

I think there must be ways to make good money from these guys, but with no one really trading them, kinda scared to get stuck in a position that I cant unravel at will....thanks guys for the comments!