Trading Weekly OptionsPricing Characteristics and Short-Term Trading Strategies
Wiley Trading 1. Aufl.
A comprehensive resource for understanding and trading weekly options Weekly options are traded on all major indices, as well as high volume stocks and ETFs. They continue to surge in popularity, accounting for as much as twenty percent of daily options volume. And while existing options strategy can be used with weeklys, they are particularly conducive to premium selling strategies and short-term trades based on a news item or technical pattern. With this timely guide, and its companion video, you'll learn exactly how to use weeklys to make more money from option selling strategies and how to make less expensive bets on short-term market moves. Written by Russell Rhoads, a top instructor at the CBOE's Options Institute, Trading Weekly Options + Video skillfully explains the unique pricing and behavioral characteristics of weekly options and shows how to take advantage of those unique features using traditional option strategies. The first book and video combination product focused solely on weekly options Outlines the most effective trading strategies associated with weekly options, including taking advantage of the accelerating time-decay curve when an option approaches expiration Filled with the practical, real-world insights of author Russell Rhoads, an expert in this field Created with both the experienced and beginning option traders in mind, this book and video package will help you make the most of your time trading weekly options.
Preface ix Acknowledgments xi Chapter 1 Introducing Weekly Options 1 Chapter 2 Short-Term Index Options 9 Chapter 3 Weekly Options on Equities and Exchange-Traded Products 19 Chapter 4 Option Pricing Factors and Short-Dated Option Contracts 25 Chapter 5 Time Decay and Short-Dated Options 31 Chapter 6 Implied Volatility and Weekly Options 39 Chapter 7 Developing Your Trading Plan 55 Chapter 8 Long Option Trades 61 Chapter 9 Short Option Trades 69 Chapter 10 Covered Calls and Buy-Writes 83 Chapter 11 Hedging with Short-Dated Options 97 Chapter 12 Bullish Spread Trading 113 Chapter 13 Bearish Spread Trading 131 Chapter 14 Neutral Spread Trading 147 Chapter 15 Split Strike Long Spreads 165 Chapter 16 Calendar Spreads 187 Chapter 17 Diagonal Spreads 201 Chapter 18 Trading Earnings Releases with Short-Dated Options 215 Chapter 19 Leveraged Exchange-Traded Products 235 Chapter 20 VIX-Related Exchange-Traded Products 243 About the Video 247 About the Author 249 Index 251
RUSSELL RHOADS, CFA, is an instructor for the Options Institute at the Chicago Board Options Exchange. He teaches about 90 classes a year and conducts webinars on behalf of the CBOE and a variety of brokerage firms. Rhoads’s twenty-year trading career has included positions at a variety of trading firms and hedge funds. His background includes trading and analysis, and he is the author of the Wiley titles Trading VIX Derivatives, Candlestick Charting for Dummies, and Option Spread Trading. Rhoads graduated with an MS in finance from the University of Memphis and a master’s certificate in financial engineering from the Illinois Institute of Technology.
While the Chicago Board of Options Exchange (CBOE) first introduced short-dated options—or “weeklys” as they’re more commonly known—in 2005, it wasn’t until the summer of 2010, when the CBOE launched short-term equity options, that weeklys really took off. In the few years since then, short-dated options have surged in popularity. Now traded on all major indices, as well as high-volume stocks and ETFs, weekly options currently account for as much as twenty percent of daily options volume. The first and only guide devoted exclusively to trading weekly options, this book/video package fills you in on everything you need to know to take full advantage of the many profit opportunities available in this burgeoning financial market. Written by options trader and CBOE instructor Russell Rhoads, Trading Weekly Options begins with a brief history of weeklys and an introduction to short-term option contract terms, expiration dates and symbols. This is followed by a series of chapters that provide in-depth coverage of the full range of short-term options currently available, including contracts on short-term indices, stocks, and exchange-traded products. Featuring a wealth of real-world examples, expert insights, and insider tips, the second half of Trading Weekly Options: Explains the unique pricing and behavioral characteristics of weekly options Schools you in a proven approach to capitalizing on those features using traditional option strategies Arms you with time-tested methods for capitalizing on the time-decay characteristics of short-dated options Shows you how to take advantage of the accelerating time-decay curve as an option nears expiration Describes techniques for combining longer-dated options with contracts that have a few days remaining until expiration Produced for traders of all levels of experience, the accompanying ninety-minute online video course covers both weekly options basics and advanced strategies not covered in the book, including methods for combining contracts on unique exchange traded funds, trading earnings announcements, and sophisticated index option trading strategies. Offering a complete blueprint for getting started in and profiting, to the max, in one of the most exciting areas of today’s financial markets, Trading Weekly Options is an indispensable resource for experienced and beginning options traders alike.
Your complete guide to understanding and taking utmost advantage of one of today’s fastest growing trading instruments Launched by the CBOE in 2005, weekly options are now traded on all major indices, as well as high-volume stocks and ETFs. Offering fifty-two trading opportunities annually—versus the twelve afforded by monthly option contracts—their popularity has grown by leaps and bound, and they now account for as much as twenty percent of daily options volume. While traditional options strategies work equally well with weeklys as they do with monthly contracts, weeklys are particularly well positioned to take advantage of premium selling strategies and short-term trades based on both current events and technical patterns. Written by Russell Rhoads, an instructor at the CBOE’s Options Institute, this book/video package fills you in on everything you need to know to use short-term options contracts to make more money from standard option selling strategies and to make less expensive bets on short-term market moves. The first comprehensive guide to getting started in weeklys and capitalizing on the many exciting opportunities in that booming finance sector, Trading Weekly Options: Clearly explains the unique pricing and behavioral characteristics of weekly options Shows you how to take utmost advantage of those unique features using a range of strategies Uses numerous real-world examples to inculcate you in the most effective trading strategies associated with weekly options Highlights techniques for exploiting the accelerating time-decay curve when an option approaches expiration Featuring priceless insights, advice and guidance from one of the industry’s foremost short-term options experts, Trading Weekly Options is a must-have resource for experienced and beginning options traders alike.