04-04-2020, 11:26 AM
(04-04-2020, 09:24 AM)john Wrote: I have options questions.
I have mostly sold puts and a few covered calls. They have been standard options, with weekly options is there any difference except that you don't have as much time to adjust your trade if the stock starts to move in the wrong direction?
Is a weekly option preferable to a standard option or vice versa?
I answered your PM. I'll repeat myself some here. Structurally there is zero difference between a weekly option and a monthly. When I buy options, which is rare, I desire more time so I can react, or just be patient. Lately my game is selling options that expire in a day or two. The market volatily gives them excellent premium value which erodes almost by the hour. Pretty easy to roll them forward a week when that becomes necessary. Usually I just take the 1-2% premium for a couple days of exposure to the risk. That has about an 80% "win rate" if I choose my positions carefully. This is very abnormal vs a "normal" market. Usually you may have to sell about a month of time to get much over 1% unless the stock is always volatile. It's rare when I sell an option dated much over a week right now. You'll get backed deep into a corner fast if the market pulls back 2000+ points in a day, which has a greater than 50% chance of happening soon IMO. I just avoid the risk. I am just trying to hit many singles and skim income. It consistently works out. I have sold long dated SPY puts. Same goal, I won't get greedy trying to time the absolute bottom. I feel no pressure to sell them in a few weeks if the market runs higher briefly. They won't be worthless for a very long time. No chance I would sell these same options I bought.