Best stocks with weekly options
Trading an iron condor results in two lots of premium being received so the income potential is higher than a single vertical spread. The capital requirement is also reduced because of the second premium received which results in a very high return potential of Sample Iron Condor Trading Plan. A short straddle is an advanced options strategy used when a trader is seeking to profit from an underlying stock trading in a narrow range. Since it involves selling both a call and a put, the trader gets to collect two premiums up-front, which also happens to be the maximum gain possible.
Due to the two premiums collected upfront, beginners are often attracted to this strategy without realizing the risks they face. The trade has unlimited risks in both directions so for this reason it is not recommended for traders with less than 12 months experience.
For First Time Investors and Seasoned Veterans
A short strangle is very similar to a short straddle in that they both involves selling a naked call and a naked put. This weekly short strangle example also has a high return but not as high as the short straddle. The breakeven points are also slightly wider. Traders should only sell weekly put options on stocks with a bullish outlook. Weekly options will move very quickly, which can be a good thing if the trade moves your way or a bad thing if the trade moves against you.
While percentage gains for selling weekly options look extremely attractive, it is also important to consider the percentage returns for losing trades. Disclaimer: The information above is for educational purposes only and should not be treated as investment advice.
Best Options Trading Alert Service
The strategy presented would not be suitable for investors who are not familiar with exchange traded options. Any readers interested in this strategy should do their own research and seek advice from a licensed financial adviser.
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The Best Day to Sell Weekly Options
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Open the menu and switch the Market flag for targeted data. In Part 2 of this series, I mentioned that I know many traders insist on selling weeklies even inside the Leveraged Investing Club. I'm certainly not interested in a knock-down-drag-out fight debating about who's right and who's wrong. I'm all about everyone making their own informed choices based on having clarity about the working components of a process. So I thought the best way to wrap up this series is to drill down a little more and take an unbiased look at the pros and cons of selling weekly options.
Clearly, the number one advantage of selling weekly options vs. I love the annualized metric because it easily allows you to compare different scenarios, situations, and trades. I liken it as a speedometer for your returns - it basically tells you how fast your money is making more of itself.
83 Stocks to Trade Weekly Options - Theo Trade
But if you're able to successfully and consistently sell those weeklies at the higher rate, then over the same one month period, both your annualized and total returns would nearly be double that of the monthly option seller. But some traders absolutely hate leaving a position open over a weekend and being exposed to unanticipated negative news events while the market itself is closed for two days.
There may be exceptions, of course, such as an ongoing position that needs to be managed or repaired , but in theory at least, selling weeklies gives you a much better shot at clearing the slate at the end of each week. As we've already noted, the biggest disadvantage is that selling weekly options provides a lot less initial downside protection than does selling monthly options. Obviously, the farther out expiration is, the more premium you're going to collect when selling an option at a certain strike price.
With a naked put, for example, your initial downside protection is the strike price times shares for each contract you're selling or writing less total premium collected converted back into a per share calculation.
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- Pros and Cons of Selling Weekly Options.
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