help with option trading?
I was wondering if it was a smart decision to buy options for the next month the day before the current months expiration or after the months expiration. Basically I am asking if options trade a certain way b4 expiration
Here is an example of what i am asking say I wish to buy Feb calls and it is jan 14th the day before the january calls expire should I buy my Feb calls before the the Jan calls or after, do stocks follow some sort of general trading trend of expiration day.
P.S. I am intelligently aware of option trading I understand the risk and I have traded them before successfully. I was wondering if there was a general strategy for buying options close to a existing option expiration. I know the stock will do well, but I don’t want to buy just to see a dip on expiration day, therefore i ask if there is such a rule for this specific scenario.
thanks uncle D thats more of the answer I was looking for!
Here’s a different approach. Try selling out-of-the-money options just before expiration to gain incremental income. You’ll recall the beauty of options decay: at the very end of their life, options waste away the fastest. By selling out-of-the-money options a few days ahead of expiration you can maximize this decay effect to your advantage. You won’t make a killing, but you can construct some high win percentages on a monthly basis. For more info see http://www.safe-options-trading-income.com/options-trading-techniques.html
trend trading | admin | January 16, 2010
I find options lose a little more value the first day that they are next in line to expire. I wait until Monday after expiration to buy. I like to sell calls before expiration.
References :
Stocks don’t necessarily follow a specific pattern if other more powerful market forces are in play, otherwise I would tend to think that prices generally tend to migrate slightly to the price point that results in the maximum net losses for all open contract holders. However with that said, it is difficult to answer your question because you did not indicate in your question if you are considering purchasing high delta in the money options or low delta out of the money options. The short term movement should be magnified with high delta contracts (approaching delta 1.00) and not much of consideration with lower delta contracts. I’d think you would be better off to pick an entry point based on something other than a specific date personally, like a technical entry point – but the advice is worth what you paid for it. Much more difficult to successfully trade options with short expiration particularly with out of the money options, be careful and make sure you really want to be a buyer instead of a writer.
References :
Generally, options theta starts rising very fast when there’s about 30 days left until expiration. So most options traders generally avoid taking long positions of front month options as they quickly lose their time value.
Also, there’s no such pattern that stocks do well on option expiration days.
References :
Here’s a different approach. Try selling out-of-the-money options just before expiration to gain incremental income. You’ll recall the beauty of options decay: at the very end of their life, options waste away the fastest. By selling out-of-the-money options a few days ahead of expiration you can maximize this decay effect to your advantage. You won’t make a killing, but you can construct some high win percentages on a monthly basis. For more info see http://www.safe-options-trading-income.com/options-trading-techniques.html
References :
http://www.safe-options-trading-income.com
Before you going to invest decide the business.
Now a days forex trading business is high level.You can earn more money with in a days.
For More information
Visit:
http://fxonline.webs.com
……………………….
References :
http://fxonline.webs.com