Weekly Options = Cheap
One of the factors that make weekly options and weekly options trading so enticing to option trading investors is the fact that they are so cheap.
Weekly options are very cheap – since there is so little time left until they completely expire. There is a drastic difference between how much a weekly option is going for when compared to a monthly option at the same strike price. And for option traders who understand what they are doing and who know how to properly utilize option strategies to take advantage of this fact – this can be a boon.
Weekly Options – Lottery Ticket?
Most uninformed option traders get into this game seeing the huge leverage that options provide – and most look at this whole game as ‘I can buy this option for so little and if it moves up I will get filthy rich’.
Unfortunately what most haven’t grasped is the fact that most options will expire worthless and this approach of buying cheap options with the ‘hope’ that they will suddenly explode in value by expiration day is a fantasy. A pipe dream. Buying a lottery ticket is potentially better.
Weekly Options – Become The House
Instead, savvy option traders will sell those options – after making sure they meet and fit within a certain criteria that stacks the odds in their favor. They sell those options to those hapless souls who are betting they will cash in big – and the majority of the time those of us who sell walk away the winners.
With weekly options this game is the same – just the time frame is much shorter – the probability ranges are narrower – and there are some important tricks and tweaks and ‘know how’ to make it work consistently. It is much like trading the same way with the monthlies – just ramped up – as we are ‘living’ in expiration week and everything is happening much faster.
To learn more about how to trade options for income in this way – including how to trade the weekly options for cash-flow – income producing strategies and how to correctly enter, exit, manage and adjust – join our free options income newsletter and website by going here (click here)