The Shortest of the Short-Term Trading Vehicles
Weekly options, which are listed on Thursdays and expire the following Friday, are meant to offer a cost-effective way to trade around events in a specific time frame. Investors who have historically enjoyed 12 monthly expirations — the third Friday of each month — now can enjoy 52 expirations per year.
The Chicago Board Options Exchange (CBOE) offers Weeklys on more than 30 different classes including indexes (SPX, DJX, OEX, XEO), stocks (AAPL, BAC, F and others) and ETFs (SPY, IWM, GLD, QQQQ and others). See an updated list of available CBOE Weeklys here.
In the second half of 2011, the volume of the index weeklys accounted for between 9% and 11% of their underlying index volume at the time. So what is it that traders love so much about these short-term options? Keep reading to find out.
- See also: Trading Rules for Weekly Options