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Wednesday, July 4, 2012

The Start Of Weekly Options

By Ted Nino

Standard call options was first introduced in 1973. Chicago Board Options Exchange started the standard call options. On 1977, four years after the standard call options were introduce, the put option was launched. Put options gains it popularity as time passes by. There was a massive increase on its trading volume and it gave a remarkable annual growth rate. The investors know how to work around with these options. The overall increase was brought about by the familiarization of the investors on using these options.

The Chicago Board Options Exchange brings a new class option called Weekly Options in year 2005. Thirty two years after the first standard call options, the weekly options was initiated. Weekly options or "weeklys" are interchangeable terms use by the investors. This new class of option behaves very much like monthly options in several ways. However, there are also differences that you will be able to determine when you compare the two of them and the most pronounce difference that they have is the fact that weeklys is only capable of existing for eight days. The expiration of weeklys is only eight days and you can get it every Thursday that lasts until Friday of the next week. On the other hand, monthly options has better expirations which is on every third friday of each month. Weekly options has the benefit of fifty-two expirations on a yearly basis and any investors of it will surely enjoy it.

Options can be use according to the needs of an investor. Strategies may vary based on your selected options. What are the best techniques for weeklys? Strategies on monthly options can be also use for weekly options. The only difference that you will encounter now is that you can do the strategies four times each month. On the other hand, you can only apply this techniques for monthly options only once.

Many premium sellers like to take advantage of an option's rapidly accelerating time decay curve on its final week of its life. More time decay curves can be observed on weekly options. When monthly options are considered, investors get to be paid 12 times. Investors were paid fifty-two times for getting a weekly option.

The strategies that you can do with are much the same strategies with the monthlies. You can sell naked puts and calls. You can also strategies like covered calls, spreads and condors. These strategies are proven with monthly and weekly options. The major difference of the two options is the time line.

About the Author:

See more about butterfly spread option trading . go over to Ted Nino's site where you can be taught all about how to trade weekly options technique for consistent monthly cashflow.

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