Tag Archives | weekly expiration

Weeklys: There are now 52 Expirations per Year, up from 12

Thanks to the CBOE, weekly expiration has arrived for a small (~20) number of stocks, ETFs, and indexes.  Information is available at the CBOE site.

New Weeklys are listed each Thursday and expire the following
Friday
, but no Weeklys are
listed when they would expire during expiration week for standard options  (3rd Friday).

The are now 52 option expiration every year.  This is good for the CBOE because trading volume is going to increase.



Option Description

Most of these options are 'regular' American style options and settle in shares.

Thus, if assigned an exercise notice on
any of the individual stocks or ETFs, you are obligated to sell shares
(if assigned on a call option) at the strike price or buy shares (if assigned
on a put) at the strike.

However, just to keep things interesting (and in my opinion, giving novice traders more chances to make a significant error), SPX and DJX options are European style and settle Friday mornings.

XEO is European style, but settles at Friday's close [corrected]

OEX is American style and settle in cash. 

One interesting idea used by the CBOE is
to change the list of stocks on a regular basis.  There is no major
revision each week, but stocks can be added or removed from the list.  The current list can be downloaded by clicking here.


Blogosphere

These options have been gathering much attention among bloggers and it's time  to join the discussion.  This product has been accepted by the public and there is every reason to believe it will continue to increase in popularity, as measured by trading volume.  


The Dancing Greeks

For anyone who loves to trade expiration and its characteristic BIG theta along with EXPLOSIVE 
Explosives gamma, this is your chance.  My fear is that the small trader, first getting started with options, will not understand just how volatile these options can be as the stock rips through the strike price in one direction or the other. 

This is truly the ideal tool for the big risk taker and makes it ever more difficult to try to classify options as a risk-reducing investment tool.

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RookiesCover
"I thoroughly enjoyed your book “The Rookies
Guide to Options”.  The book has paid for itself many times
over.  Thank you."  VR


"I am finishing your book The Rookie’s Guide to Options
and I agree with the other reviewers on Amazon."   DE

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