Selling weekly options vs monthly options
- Thread starter nwoptions
- Start date
Better idea: Sell straddles! Why would the price change from current levels?!?!
TSLA scares me. I will only trade it the last hour or two of expiration day. Look at that $200 swing first hour of trading. NOPE! Trading TSLA on a monday is like trying to ride a bull with two broken arms.
I would hope no one would take my joke seriously!
I prefer to play TSLA on the put side. Talking 350ish-strike puts a couple months out for around 2.0 (last time I did it). Guaranteed profit unless the world ends.
like some others said, the gamma risk is too high for me unless i'm buying OTM singles or narrow spreads and making a quick bet. with individual stocks especially it's too easy for the underlying to blow past your strikes and making rolling out or adjusting impossible as the remaining extrinsic disappears quickly as they go ITM
Do you agree with this statement?
With all else being equal, selling weekly options (eg bull put spreads) has a higher success rate than selling monthly options because there's less of a chance that the stock will decline, say, 10% to your short strike price? Stocks typically need more time than 1 week to decline in price a lot and the odds are in favor of the stock staying above your short strike.
With all else being equal, selling weekly options (eg bull put spreads) has a higher success rate than selling monthly options because there's less of a chance that the stock will decline, say, 10% to your short strike price? Stocks typically need more time than 1 week to decline in price a lot and the odds are in favor of the stock staying above your short strike.
"With all else being equal", it's not. The premium for the same delta call or put on the weekly expiration will be a lot less than the same delta on the monthly expiration unless there is some short-term event like earnings or Fed announcement impacting both contracts. For example, the Fed is expected to provide more detail tomorrow on their plans to reduce the purchasing power of the USD, widen the wealth gap, and reduce world reliance on the USD as the world reserve currency. This event will affect both this Friday's weekly SPY expiration as well as the September expiration. This week, the 0.1 delta call (351 strike currently) is going for 0.24. But the September 0.1 delta call (362 strike currently) is trading for 0.54 or a little over double. Without the currency devaluation disclosure event tomorrow, the difference would be a lot greater.
Am directional trader, trend is my friend, so for few days can see direction far greater accurately and buying has unlimited potential, whereas selling opposite of trend, when wrong has unlimited losing potential.
I am unable to fully understand Greeks well enough to use them, too many head injuries/surgeries, lucky enough to comprehend charting, opening blue pill bottles, and hand not cramping while up her p...
BTFD call options or for those Elliott wave artists, wave 2 and 4. Overall, 66% of the time markets rise. And best times markets rise is last four business days of old month and first two of new month. Think I have that right...had something to do with mutual funds dumping bad stocks and buying better. Right?
There's some very sharp option traders here dealing with the Greeks, I am not one of them. Trading the markets is about not lying to oneself and work the areas you are good at whether large or small. Consistency wins out.