Hi Everyone, I was checking to see if there may be a few others who actively do momentum weekly options with straight leg calls or puts? I have been actively trying to get some sort of consistency around a strategy, but it has been unsuccessful. I would be interested in discussing in order to learn more. Please feel free to reach out to me. Appreciate it.
I develop trend using weekly then get signal on daily, less whipsaws, I avoid some losing trades. I spent a year trying to use weekly outright longs of calls and puts, system worked great on stocks but when I applied weeklies losing percentages went up. Gave up the weeklies and then developed something that seldom lose but have to patient at times. Trading is often about waiting. The underlying can go up and option sits there as clock is evaporating away.
So you want to be able to consistently catch outsized, as priced in by MMs, moves with 5 day precision!? Unless you have some inside info, it sounds impossible.
Do not restrict yourself to weeklies only. Experiment with different maturities and use the right tool for the job.
I used to trade the naked weeklies (SPY & QQQ) but it has incredible volatility and leverage. If you are right (or lucky) you can make tons of money however if you are wrong in the direction it almost always goes close to zero. Seems like best use of the naked weeklies is in gaining tons of leverage without buying futures. SPY weeklies can have leverage >100:1 near the money. SPY actually has 3 weeklies.
What would be a good put to watch if the idea was to make a buck buying a put in order to see how it performs compared to the underlying in the event that the double top underlying AVB drops to 226.5 where an exit could be in order? Would you go with a monthly? 40delta?, 75delta? other? Admittedly this may not be the right tool for the job but for now I'm Keeping in mind that the current situation wants the result from a Simple Buy Put to watch. Thank you for your and any other's views on this scenario. https://elitetrader.com/et/threads/charts-for-no-reason.344272/page-23#post-5587485
I've done reading on weekly options, and plan to dig a bit more into researching, but as a matter of principal, I don't trade them (this will probably change someday for some rare events). Eventually, hourlys will be the next thing now that dailys are starting.
directional momentum? it's hairy dealing with the short term time decay and gamma. Sure it may work, it's just another vehicle among others right. My thinking is futures is generally more efficient for these kind of strategies. My bread and butter is trading the SPX weeklies, mostly because I got a very very specific need that can only be met by a few SPXW structures. If I could trade ES I would.
Do you ever buy calls as an entire trade? or buy puts as an entire trade? What is a likely hold time for one of your trades? Any particular day(s) stand out as better than others for entering a wkly options trade?