Wednesday, December 13th, 2017

help with option trading?

I wondered if it was a wise decision to purchase options for the next month the day before the current month or after expiration of the expiration month. Basically I’m wondering if trading options in a certain way due B4He is an example of what I am asking that you want to buy calls in February and January 14 is the day before the January calls I buy my calls expire in February before Jan calls and then make reservations still some kind of trade in general trend vencimiento.PS days of negotiation I am aware smart choice and I understand the risks have changed before successfully. I wondered if there was an overall strategy for the purchase of options close to expiry of the existing option. I know that the stock will do well, but I will not buy just to see a dip in the due date, so I ask if there is a specific rule for this escenario.D thanks dude that’s more than the answer was looking for!

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6 Responses to “help with option trading?”
  1. Uncle D says:

    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.

  2. Kip says:

    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.

  3. John S says:

    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.

  4. Michael says:

    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

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