"quickie" Options

S

spreadgod

Got this from a memo:

You may remember reading a while ago about “quickie” options. Well, the SEC has approved them and we expect them to trade in September. The group’s opinion is that call/put writer will love them. We shall see.

Has anyone heard of quickie options that can provide some information on them?

Thanks!
 
hehehe

A great thing if they're indeed 7d expirations. Pure gamma, baby! I think they need to work on the name, however. How about, "Baby... I missed my expiration" ??
 
Quote from riskarb:

It's an asian exotic variant based on the "happy ending" knock-in.:D
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LOL. That would make sense that the call/put writers would love them. Hell, the buyers would actually like them better I'm guessing.

Seriously though, how much premium would you get out of a week's option? Or could this be a new way to play the earnings game?

I would guess the premiums would be higher before announcements.
 
Quote from riskarb:

hehehe

A great thing if they're indeed 7d expirations. Pure gamma, baby! I think they need to work on the name, however. How about, "I missed my expiration" ??
More...


How about: "Where did my option go, I just bought it last week!?"
:D
 
Quote from spreadgod:

LOL. That would make sense that the call/put writers would love them. Hell, the buyers would actually like them better I'm guessing.

Seriously though, how much premium would you get out of a week's option? Or could this be a new way to play the earnings game?

I would guess the premiums would be higher before announcements.
More...

They've been available in the interbank market for years, vanilla and exotic. Very large swings on these as the greek risk is nearly all gamma/theta. They typically trade at a discount in vol the the conventional 30d we're used to, which is moot as they're virtually isolated gamma-exposure.

They offered 7d options on Gold at the Comex some time ago, but they never took off. I expect the markets to be very wide as as % of premium as they'll require spot-hedges to replicate.

Either way it's gambling on both sides of the trade.
 
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