Weekly Option Spreads

C

chicagodon

Just curious..

Is anyone currently using weekly options for spreads like butterfly, straddle, strangle? Just wondering how these weekly's work with spreads. The people I talk too about these weeklies seems to use them more for hedging longer term stock positions or pure gambling trades.
 
Thanks, that's actually what I was looking into, neutral type strategies with the weeklies. Just was wondering if it was worth pursuing or better off sticking with the monthlies.
 
Quote from chicagodon:

Thanks, that's actually what I was looking into, neutral type strategies with the weeklies. Just was wondering if it was worth pursuing or better off sticking with the monthlies.
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It depends on the market.

When market goes down and VIX goes high, usually volatility of weekly options will higher than volatility of month or two month options.
So it makes a sense to use weekly calenadar or diagonal spread.
Sell weekly option and buy month or two month option.

But you can use it with monthlies calendar spreads too. :)
 
Quote from optiontraders:

It depends on the market.

When market goes down and VIX goes high, usually volatility of weekly options will higher than volatility of month or two month options.
So it makes a sense to use weekly calenadar or diagonal spread.
Sell weekly option and buy month or two month option.

But you can use it with monthlies calendar spreads too. :)
More...


Thanks, that makes sense
 
Quote from ktm:

I do them on ES options quite a bit.

I think it's the best game in town.
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Thanks. I can see the potential such as calendar spreads and butterfly's on the weeklys. I'm thinking about opening another retail account only for options trading, currently either OptionsHouse or MB trading, any thoughts?
 
I use IB but whatever broker you are comfortable with will work as long as they can effectively trade spreads.

Weeklies give you so much more flexibility and granularity in terms of offsetting positions, rolling out and tapping volatility in precisely the way you like given your vision for the near future.
 
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