Weekly Option: Theta Gain with Gamma Risk

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When I looked at my trades, realized that almost 90% of them are on weekly options.

Weeklies advantages are :

  1. Theta decay is most fierce in the last week of expiration
  2. Plenty opportunities to do Earning play
  3. Technical Signals setup; Hammers, Shooting stars and crossover .etc
  4. Ride on Macro news like FOMC, Oil inventories or any major news
  5. Counter like SPX have three expiry dates within a week
  6. Big counters with weeklies are gaining more liquidity and thus easy to close or exit

 

There are a few downsides of the weeklies :-

  1. Gamma risk (positions get tested often)
  2. Adjustment is almost impossible
  3. Commission cost

Of late, I have been trading on a new broker platform and that save me a huge commission cost with $1 per contract and no closing cost.

tastyworks

Do open an account with tastyworks.com if you trades weeklies.

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Penny Increment Options watchlist on TDA

 

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Recently, at local option gathering group, we were discussing using TDA scan to identify stocks to play options. A friend ask for me for any good watchlist. I recommended them to use penny increment options from TDA platform that provide optimal price and  liquidity for option.

 

 

 

Tastyworks – a day of FREE trades!

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Beside low commission of $1 and no closing fee, they also provide free trade on 23 Aug 2017.

Can signup an new account here tastyworks.com

Oversea or non-resident of US, when opening an account chose Margin and non-residential. The paperworks is quite straight, transfer of fund instruction is clear within 5 days the fund will be deposited and the help desk people are really helpful and most willing to answer any questions.

Do note that Tastyworks is an oversea broker and not regulated by MAS. 

 

New ebook : Trade Option With An Edge

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http://www.tradeoptionswithanedge.com/

The author study Tastytrade style of option and some of the chapters seem interesting like Chapter 10 on Evaluate Candidate Strategies.

Beside POP, BE, ROC etc which is quite common,  the author introduce Theta Efficiency which I have not considered previously in all my option trades. I decide to buy the ebook online at USD$3.99 and it come with an free excel software which calculate all these ratio automatically. However, the excel is so rich that I am still trying to figure how to use it effectively.