Weekly Options – Quick Cash Infusion

One weekly options trading strategy I like to use is to mix selling weekly options in with my traditional monthly income trades.

For example, last month in our Options Income trading lab we had on a monthly iron condor trade. This trade was just a standard ‘vanilla’ type of iron condor – however due to the big run up we have seen in the stock indexes over the last month we did have to employ some adjustment strategies to the upside.

At one point in the trade our position was lopsided as we had bought back all of our put credit spread trades and only had on a hedged call spread above where the underlying was trading. When we got to the weekend – Friday (this was with a few weeks still to go until option expiration) we realized we had an opportunity to bring in some additional credit / premium to help out our trade.

Normally at this point – before the weekly options were around – we would consider selling some same expiration monthly put spreads agains the position over the weekend to try and bring in a quick short ‘cash infusion’. The thing with making that type of trade however, is that there is still some good time / life left in those monthly options and if the underlying were to quickly start moving down we could find ourselves in a position where we would need to begin managing those new put spreads – and even potentially baby them all the way until expiration.

We were just looking for a quick ‘over the weekend’ cash infusion – where we could sell a few put spreads – bring in some additional credit – and then get out of them early in the next week.

Weeklys are perfect for this. True, you may not get as far away from the money as you might with the monthlys – but the weeklys will decay so quickly – if you place the trades appropriately most likely you’ll be able to get your ‘quick cash boost’ and then get out of the trade before any heavy duty management needs to be done.

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