Weekly Options Paychecks | Market & Trading Weekly

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Many option traders look at weeklies to collect premium and potentially turn a quick profit, but it’s important to weigh the risks of selling weeklies rather than further dated cycles.

In this segment, we look at 45 DTE vs 7DTE, and show how the trades compare over the course of time.

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Comments

Matt says:

I am still confused on how further out limits your risk. If I sell a 2600 OTM PUT SPX spread 5 days out vs an SPX 45 days out, the strike is still the same. 10 days in SPX can hit 2600 and now I'm ITM. I could care less for stats, I just want someone to explain this to me how selling further out gains me any if my strike price is the same. Sure I'll capture a higher premium and reduce my risk to vamma.

RedDysfunctional says:

I want daily options.

Rob Petrie says:

Now, would love to see a study that sells weekly puts and holds to expiration. I suspect the results would be interesting.

James Gray says:

Would you please first describe the position before doing the analysis..
What options combo.comprisrs a strangle?
Thanks

Sam Finance Tech says:

Very informative stats of long term over short term P/L… But longer dated, is quite risky on most mindset ?

Edgar De Sola says:

Nice! Do a study of selling weekly delta 20 cash secured puts and delta 20 credit call spreads. Thanks

HB Stone says:

8:12 This would have been a good time to talk about gamma risk. Also, 7 day trades don't really give you much of a window to make 50% a feasible strategy, you might only have 1 DTE or so to have that chance. Should have tried them both at 25%, or the 45 DTE managed at 50% and the 7 DTE managed at 25% or even lower. Maybe doing four trades per month at 15% works out better than one trade per month at 50% max profit, would be nice to confirm/deny with backtesting.

Not to say weeklies are better, I'm just saying this looks like pretty weak data science 🙂 I am in the 30-50 DTE camp for sure, having already lost a bunch of money chasing weeklies. But this was not a great video to back up that theory.

bluenetmarketing says:

Here's an idea you don't own. How about creating options that are self-defined, i.e. I pick an expiration date myself. It could be five minutes from now, five hours from now, five days from now, or whatever. Obviously with something like this, the option value would pretty much be calculated using the Black-Scholes formula. You could even allow a trader to mix and match options between underlyings. In other words, I could create a credit spread by selling short OTM IBM calls while buying long OTM calls on KKD. The more you can mix and match underlyings, expiration dates, etc., the more interesting it becomes. This would completely unnerve the stuffed shirt manipulators in the market today, because they couldn't control enough of the variables that would be expressed by the masses of traders out there. It would level the playing field, in a manner of speaking, by introducing disruption to the staid and closed shop system of today.

Corey Smith says:

Man.. One of the greatest brands on the face of the earth.. ..

Chad Starnes says:

You guys are AWESOME freaks!! Love your shows!!

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