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Every Week Is Expiration: Using Weekly Options to Reduce the Cost of Longer-Term Positions
By Steve Smith Aug 10, 2012 10:30 am Weekly options are a great way to manage risk and increase the probability of profitability.
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exantefactor there is a correlation that seems to be escaping most that i think holds the key... more tomorrow on @Minyanville
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GradeACue W hy the W ealthy Lack the Ability to Perceive Emotions shar.es/42fRP via @minyanville
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Every Week Is Expiration: Using Weekly Options To Reduce The Cost Of Longer-Term Positions | Options | Minyanville's Wall Street
buy/writes or covered calls, the weekly options can help you cram in additional expiration cycles to collect premium. The one caveat is when there is known pending news, such as earnings or a regulatory ruling, in which case the implied volatility -- which is really just an artificial expansion of time -remains high and keeps premiums pumped up. This needs to be addressed on a case by case basis. In fact, for longer term stock holders, using weekly options can be a very effective, time-focused, and low-cost way to ride out an impending event such as earnings. With most of earnings season past and things expected to slow down in the final two weeks of August, having two sets of options that run from August 16 to August 24 and from August 23 to August 30 can provide some good flexibility to positioning rather than being confined to using the next regular options, which dont expire until September 22. One might consider selling an iron condor on the SPYs using these weekly options on the belief the market will remain range-bound until after Labor Day. And if you think that first jobs number will be a big market mover, then the options that listed on August 30 and expire on September 7, the day of the labor report, might be a low-cost way to play. Using weekly options to reduce the cost of a longer-term position is a great way to manage risk and increase the probability of profitability. Twitter: @steve13smith For more from Steve Smith, take a FREE 14-day trial to OptionSmith and get his specific options trades emailed to you along with exclusive access to his full portfolio. Learn more. Follow the markets all day every day with a FREE 14 day trial to Buzz & Banter. Over 30 professional traders share their ideas in real-time. Learn more.
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japhychron @conorsen That's w hat I am leaning tow ards, but the debate betw een the ears rages on. @minyanville
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Every Week Is Expiration: Using Weekly Options To Reduce The Cost Of Longer-Term Positions | Options | Minyanville's Wall Street
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