Wednesday, March 5, 2014

why trade weekly options?

Trading weekly options  has the potential to offer quick turn around on your capital. 
In my observation weekly options has a higher probability of expiring worthless then the monthly option contracts. 

Although the premiums are lower but if done right the return may be higher in the weekly's. 
Out of the money weekly options on indexes and etf's offers enough premium to sell
at lower cost/margin requirements. 

In my strategy I choose a balanced portfolio of etf's to offset the risk on either side, the candidates have highly liquid options contracts, strike prices are 1 to .5 points apart and finally the underline has enough implied volatility offering adequate premiums to offset fees/commission costs and turn into a profitable trade.

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