When do you place your option trades?

J

jwcapital

I've been trading options for over 10 years, and I never really had a discussion with anyone about when to enter option trades--specifically what time of day or even a specific day of the week. I usually trade the near-month options after the previous near-month options expire. I like to trade at the end of the day (from 3:45-4:15 EST). I like to sell bull put spreads (negative vega spread) when the VIX is up for the day. (By placing bull put spreads I have already decided that the environment calls for this particular trade). I also try to place the trades the Friday of expiration.

Does any of this really make a difference?
 
That is the time I usually placed stock options order, from 3:45 to 4:00pm. Which stock optons are trading after 4:00pm ?

As to futures options, I will trade when opportunity presents regardless time of day.

People says long options at the beginning of a week and exit on Friday. But from my experiences, there is NO big differences between Friday closing price and Monday openning price.
 
Quote from jwcapital:

I've been trading options for over 10 years, and I never really had a discussion with anyone about when to enter option trades
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I suggest ignoring the clock and entering a trade when your conditions are met.

If using technical analysis, then your charts tell you when.

Otherwise, I suggest trading when the stock is priced where you want it to be and/or the options are priced well for you.

As an iron condor trader, for me, that advice translates into deciding how much premium I want to collect and entering an order to trade at that price.

If 'VIX is up for the day' is your guideline, then you are usually limited to end of day trades. Your conditions for making a trade dictate that - and there's nothing you can do about it.

Mark
 
Quote from dagnyt:

I suggest ignoring the clock and entering a trade when your conditions are met.

If using technical analysis, then your charts tell you when.

Otherwise, I suggest trading when the stock is priced where you want it to be and/or the options are priced well for you.

As an iron condor trader, for me, that advice translates into deciding how much premium I want to collect and entering an order to trade at that price.

If 'VIX is up for the day' is your guideline, then you are usually limited to end of day trades. Your conditions for making a trade dictate that - and there's nothing you can do about it.

Mark
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exactly... given the unpredictability. there is no such thing as a fixed time. when it meets your criteria. you do it. or else its like a monkey shooting darts..!.
if you knew, you would be GOD.!
 
Quote from ramaTrade:

That is the time I usually placed stock options order, from 3:45 to 4:00pm. Which stock optons are trading after 4:00pm ?

As to futures options, I will trade when opportunity presents regardless time of day.

People says long options at the beginning of a week and exit on Friday. But from my experiences, there is NO big differences between Friday closing price and Monday openning price.
More...

Your kidding me. Front month?!
 
Quote from dagnyt:

I suggest ignoring the clock and entering a trade when your conditions are met.

If using technical analysis, then your charts tell you when.

Otherwise, I suggest trading when the stock is priced where you want it to be and/or the options are priced well for you.

As an iron condor trader, for me, that advice translates into deciding how much premium I want to collect and entering an order to trade at that price.

If 'VIX is up for the day' is your guideline, then you are usually limited to end of day trades. Your conditions for making a trade dictate that - and there's nothing you can do about it.

Mark
More...

Just a follow-up: The conditions for trading iron condors are basically the same for iron butterflies and even bull put spreads. One wants a high volatility environment, and one is looking for a volatility "crush." As an example, I want to place an iron condor this Monday. The VIX is slightly above the historical norm, and it appears to be heading lower or rangebound. Since I trade S&P index options, I note that the index is trading in a narrow range. As far as price: I do use trendlines to help me choose the short legs, and I stay outside the support and resistance levels. How far away is determined by the premium I wish to receive as well. One observation I had noticed: If I wait for the "VIX is up by the end of the day," I don't get the premium I want at the place I want it. So, it does appear that your advice is reasonable--for despite the daily fluctuation of the implied volatility, I am also battling time decay. So, it seems that "sooner the trade is placed, the better." Does this make sense to you? Jeff
 
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