I've been trading weeklies since May - just about each week since. Although that's not a large sample size to draw any solid conclusions, I can say I've made many mistakes, and some successes. The major issues I find are liquidity and fills for adjustments -it's probably intuitive when thinking about a weekly option, but it's worth saying - It's faster than the traditional expiration cycle in terms of theta decay, as your extrinsic value fades the more trashing there is -- I think it's equivalent to trading in expiration week. It's also fairly tight - by that I mean if you have a profitable spread and want to roll it in to collect more theta -- the fills are near impossible if it has little net extrinsic value remaining.
I would back test them on TOS and assume a slippage of $0.20 per contract to get reasonable results.
I used to trade OEX, but after assignment (twice), I switched to XEO (european settled OEX). I've also traded Apple and IWM weeklies. I've never had a position that I didn't need to adjust at least a couple of times, some as many as 1-2 times a day.
I prefer ATM calendars or ATM flies. I would back test both to find your preference, and think about lowering your profit target due to the shortened time frame. I think you'll find better overall results with a 3-8% profit target.
Just my $0.02
On Fri, Jul 23, 2010 at 9:26 AM, rick8work
<rick2max@gmail.com> wrote:
Paul,
A better question to ask would be:
Is anybody here having any success trading the weeklies and if so what strategies are you employing?
Rick
--- In
OptionClub@yahoogroups.com, "Kenneth Ginsberg" <ken_ginsberg@
...> wrote:
>
> You place an order to buy them to buy them, or place an order to sell them
> to sell them.
>
>
>
> Hope this helps. Perhaps calling your broker and asking him if they do it
> differently might be a good idea also.
>
>
>
> Ken
>
>
>
> From: OptionClub@yahoogroups.com [mailto:OptionClub@yahoogroups.com] On
> Behalf Of paul7313
> Sent: Thursday, July 22, 2010 12:40 PM
> To: OptionClub@yahoogroups.com
> Subject: [TheOptionClub.com] now that I have paid my dues
>
>
>
>
>
> can somebody tell me how to trade weekly options? I don't know some tade
> spx, some trade spxu. I want to start with 1 contract
>
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