Happy post options expiration to you! Here is the upload of our Friday Open Session from June 15th. A recap of the discussion:
1. David: Can you discuss Weekly vs. Monthly spreads, and why anyone would trade a monthly when weeklies are available?
Start to 16 minutes
- We break down our 3 reasons why one might trade a monthly over a weekly, our experience with 1 week to 2 week to 4 week trades and more.
2. Vallon: How soon is the option price adjusted before the Ex-Div date? 16:30 to 17:40
3. Srinivasan: Should the Break Even on a Bull Put spread be below the stock price? 17:45 to 20:05
Yes, but we break down the Bull Put spread risk:reward profile and the risks of ITM Bull Put spreads.
4. Bill: I'd love to hear your thoughts on using margin on options, and the risks of margin. 20:15 to 26 minutes
We talk about the margin set aside for spreads, how you may need more than that in the case of early assignment.
5. Fernando: TO avoid a margin call on a spread is it better to use a debit spread? 26:15 to 34:50
Reminder of rights and obligations of any spread, compare Bull Call to Bull Put, and risk of early assignment.
6. Bill: How can we screen for highest Theta? (Plus, what is the best day to open a new trade?) 35-48:40
We take a look at setting up the Search for Time Value, % Time Value and Theta, Then discuss our testing results, risks of 1 day out trades and the changing Theta curve as you get closer to expiration.
7. Sam H: A look at a Bear Call Spread on BIDU that has gone against him. 48:50 to 59:05
A look at the 6 or 7 ways to manage a Bear Call Credit Spread
8. Bill: When you are unable to trade for a few days, do you close out or only use certain trades during that time? 59:15 to 1:00:00
9. Rhajiv: A look at one of Rhajiv's 1 week out Diagonal on DIS and Horizontal on DAL. 1hr 3 mins to 1 hr, 8 mins
A look at the two spreads and potential management.
10. Bill: When should you roll a short call or short put for profit?
1 hr, 9 mins to 1 hr, 19 mins
We look at closing positions early, the effect on a trading plan, using the Trade Simulator Tool.
11. Fernando: Why does Gamma of an ATM option increase as we get close to expiration? 1 hr, 19 mins to 1 hr, 24 mins
Definition of Gamma, how it reacts and what happens at expiration.
12. Bill: I sold a call at $1.00 and close it for $0.80, do I lower my risk overall by lowering? 1 hr, 24 mins to 1 hr, 30 mins
A look back at the Trade Simulator tool, risks and benefits of closing early, and win / loss ratio.
12. Wrap up and Search Summary tool. 1 hr, 31 mins to end
We wrap up but answer one last question on using the Search Summary tool to compare strategies on the same stock.