5 Advantages of Trading Weekly Options

What is it that traders love so much about Weeklys?

      View All  

#2 - Weeklys Undergo Rapid Delta Swings

slot machine 5 Advantages of Trading Weekly Options

Weekly options may not be good for conservative traders, but they are great tools for gamblers. That’s because longer-term options have a slow-changing delta because gamma is small and the option’s price does not change dramatically as the option moves from an out-of-the-money position to an in-the-money position.

With Weeklys, gamma is explosive. With so little time in the option’s life, an out-of-the-money option with a 20 delta may suddenly have an 80 delta as it moves in the money by a point or two. That results in dramatic changes in the price of the option, which can be great for speculative traders.

One other thing to note: Options buyers rejoice when their options move in the money, but option sellers lose their bet.


Article printed from InvestorPlace Media, http://investorplace.com/2011/08/advantages-of-trading-weekly-options/.

©2014 InvestorPlace Media, LLC

Comments are currently unavailable. Please check back soon.