Stocks & Commodities V. 29:2 (48-50): The Expiration Trade by Joe Luisi
The Expiration Trade by Joe Luisi
In this world of algorithmic trading, how can an independent trader stand a chance? Here’s one way you can trade options to get an edge in the markets.
WE have all heard that 70% to 80% of all options expire worthless. Many of us have purchased options, only to watch the market move in the direction we anticipate and still lose money as the option we bought drops to zero. I’m not sure whether the percentage of options that expire worthless is correct and there have been articles published about that statement in general, but the one thing I do know is that all out-of-the-money options expire worthless. The key is to determine where that “out of the money” is.
SO WHAT'S YOUR EDGE?
The exciting thing about selling options is that you can stack the odds in your favor to get an edge in the markets. But edges are hard to find, even more now with so many supercomputers looking at patterns and algorithms trading in fractions of a second. In such an environment, is it even possible for an independent part-time trader to get a leg up in the market?
Successful option selling requires determining where the market won’t go. Can you sell an option with only one week till expiration and make money? How about limiting your risks?
FOR THOSE ORDERING ARTICLES SEPARATELY:
*Note: $2.95-$5.95 Articles are in PDF format only. No hard copy of the article(s) will be delivered. During checkout, click the "Download Now" button to immediately receive your article(s) purchase. STOCKS & COMMODITIES magazine is delivered via mail. After paying for your subscription at store.traders.com users can view the S&C Digital Edition in the subscriber's section on Traders.com.
|Take Control of Your Trading.|
|Professional Traders' Starter Kit|
|All these items shown below only $299.99!|
|5-year subscription to Technical Analysis of STOCKS & COMMODITIES, The Traders' magazine. (Shipping outside the US is extra. Washington state addresses require sales tax based on your locale.) 5 year access to S&C Archive 5 year access to S&C Digital Edition5-year subscription to Traders.com Advantage. 5-year subscription to Working Money. Free book selection. |
|Click Here to Order|