Seeking Alpha

OptionSIZZLE's  Instablog

OptionSIZZLE
Send Message
OptionSIZZLE is created to help you better understand and become more familiar with options and what the professional traders are doing everyday in the market and provide effective options trading strategies to allow you to trade better and trade smarter. We have found over the years some of the... More
My company:
OptionSIZZLE
My blog:
OptionSIZZLE
  • Trading Weekly Stock Options – 4 Tips You Should Know! 0 comments
    Nov 13, 2012 10:52 AM

    Weekly options trading is fairly intuitive. The list of weekly options are listed every Thursday, and they expire the following Friday. Weekly options are available on all the usual stocks and indexes, such as the S&P 500 Index (SPX), along with the major exchange-traded funds (ETFs), such as the Financial Spider Select XLF.

    Weekly options are also available on some of the most widely traded equities such as, includes Apple Inc. (Nasdaq: AAPL), Exxon Mobile Inc. (NYSE:XOM), and JPMorgan Chase & Co. (NYSE: JPM). The list of stocks and futures that are traded regularly change. Information with regard to availability are listed on the CBOE web site.

    Weekly Options Tips

    • Trade weekly options when you are looking for a short term movement in a financial instrument

    Trading weekly options have many benefits. The options have a shorter duration than standard options which expire every 3rd Friday of the month. Shorter dated options will cost less than longer dated options, because there is less time value which generally drives up the price of an option. You should trade weekly options when you are looking for short term movements in a market.

    • Use weekly options to take advantage of volatility around an economic event or earnings release

    Weekly options can be specifically valuable around economic data releases or earnings releases. Because you can keep your premium to a minimum, there's probably no better way to maximize the power o leverage within the generic options arena.

    • Trade weekly options when you need to hedge your portfolio

    If you have a portfolio of stocks and options you might be able to offset some of your exposure with weekly options. You can purchase insurance or short-term protection for your stocks. The cost will be low than standard options with more than a week to expiry. Additionally, to hedge your exposure to the market you can purchase weekly puts on the major indices to offset potential losses on your portfolio.

    • Generate short term income by selling covered calls

    You can also sell covered calls on weekly's. Although the income you receive will be less than a longer term option, your waiting time until expiration will be a lot shorter.

    Weekly Options Specifications

    The Chicago Board of Options Exchange offers three different types of weekly options, along with weekly settlement data and volume/open interest information. Some of the options they offer have morning settlements while others offer PM settlement.

    Weekly options are traded using American-style exercise features, which make then exercisable at any point prior to the expiration date. On expiration, the buyer has the right but not the obligation to receive the underlying instrument.

    Liquidity on weekly options is robust, with the average weekly volume for the new weekly options increasing above 300,000 contracts by November 2010.

    Your weekly options Edge

    If you want to know all the ways on how to trade weekly options successfully, check out my digital guide "Discover How To Make Money Each Week Trading Weekly Options", which you can download read in just a few minutes.

    It's time for you to stop sitting on the sidelines wishing about all the money you can make, and start learning and understanding how to make money trading weekly options. I'll show you how.

    Go here for all the details: Weekly Options Training Course

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Back To OptionSIZZLE's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (0)
Track new comments
Be the first to comment
Full index of posts »
Latest Followers

StockTalks

More »
Posts by Themes
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.