Day Trading Weekly Options for Massive Gains (High Risk)
trade stocks September 26th. 2020, 8:39pm
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Day trading weekly options can be an immensely lucrative strategy, as it’s possible to 10x or even 100x the money put into these strategies. But those returns come with high risks.
In this video, I explain why traders would want to participate in short-term / weekly options, including real historical option data to visualize how short-term options perform relative to longer-term options at the same strike price.
Weekly options can provide such huge returns in a short period of time because short-term options (little time left until expiration) are hypersensitive to changes in the stock price. If you buy a short-term option and the stock price moves towards your strike price (or through it), the option’s value will increase immensely.
But at the same time, if you buy a short-term option and the stock price moves against your position (such as a decrease in the stock price after buying a call option), your position will lose money quickly.
Fortunately, buying options has asymmetric return potential: your risk is limited to what you pay for the options, but your return potential is virtually uncapped.
Because of this, you don’t need a high rate of success to produce profits when buying options, especially short-term options.
In this video, I cover the main reasons why traders like to buy short-term weekly options. Be sure to check out the rest of the series to learn even more.
Be sure to leave a comment down below with any questions you may have!
=== RECOMMENDED VIDEOS/RESOURCES ===
Call Options 101: https://youtu.be/fUZHmJAvN30
Implied Volatility Explained: https://youtu.be/H-NHZq-skFo
Stock Options Trading 101: https://youtu.be/3bELT5FZCic
Why Early Exercise/Assignment is Rare: https://www.youtube.com/watch?v=7pTb1a5IgKM
Options Trading For Beginners (PLAYLIST): https://www.youtube.com/playlist?list=PL33AZa4cv-o58ldr-5zSn4ROx4SZG7Jyo
tastyworks Tutorials (PLAYLIST): https://www.youtube.com/playlist?list=PL33AZa4cv-o56a2BO3jpK_PBUFe3FdvxP
Option Pricing EXPLAINED: https://youtu.be/-nnJ4pMBaxA
Options Trading 101: https://youtu.be/3bELT5FZCic
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September 26th, 2020 at 9:37 pm
A bit of a different video than what I've put out in the past, but it's time to start talking about a different, more high-octane arena of options trading. Please note that while the examples in this video were not intraday trades, the same exact concepts to buying short-term options and closing the trades within the same trading day. Let me know if you have any questions!
September 26th, 2020 at 10:27 pm
I started making consistent profits after learning how to trade the stock market from Lewis Aron Coach trading community. I make more then 100k a year now for 6 years. Newbie stock and option traders should learn how to trade and make profits from Lewis Aron Coach trading community.
September 26th, 2020 at 11:02 pm
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September 26th, 2020 at 11:58 pm
How do you pick the right strike ?
September 27th, 2020 at 12:44 am
Can we be sure somebody will buy the option off me hours before the expiration if I am in the money?
September 27th, 2020 at 1:38 am
I could be wrong, but this seems very misleading. When you first buy a call option, you're 100% in the hole, and you only begin to climb out if the underlying moves up. You only break even, in terms of intrinsic value, when the stock has moved the amount of the option. There's also some extrinsic value, but as you're talking about short-term options, it's relatively low and rapidly eroding.
September 27th, 2020 at 2:23 am
Great presentation! Thanks!
September 27th, 2020 at 3:13 am
Great Info………Thank You !
September 27th, 2020 at 3:41 am
Never confuse "large potential" with "easy to succeed". In fact, with options there is conservation of difficulty: the larger the potential gain the less likely it is to occur, the smaller the potential gain the more likely it is to occur.
September 27th, 2020 at 3:49 am
I'm a sick puppy. I trade options that expire on the day. Average trade hold time? Under a minute. Working for me so far. Haha
September 27th, 2020 at 4:09 am
Leverage up boys!
September 27th, 2020 at 4:40 am
just subscribed. very good video bud! thanks for the information. first time trading weekly options today and i must say it was interesting and dangerous.
September 27th, 2020 at 4:46 am
Projectoption I just want to know is it like nadex where all you have to do is know if the price of the contract will be above or below the strike price? So like today BAC price is at 25.78 I know that buy expiration friday tomorrow the price will not close above 26.40. If I buy a $26 put right now at .53 each and as long as the price stays below $26 or whatever strike price I choose above $26 that contract will be at a profit and I can close out early making money off of the put option price? I don't have to be below the price and then go above by expiration in order to profit off just buying or trading the options contract like you're saying. Right? Or no
September 27th, 2020 at 4:48 am
Please do send me everything u can
September 27th, 2020 at 5:09 am
Best site to open an account
September 27th, 2020 at 5:42 am
I try and get in weekly trade options atleast by friday since most expire around friday.
September 27th, 2020 at 5:49 am
How do you factor in taxes if you see profits from these every week?
September 27th, 2020 at 6:03 am
Should you also be comparing the delta values of both the short & long-term options, alongside the corresponding strike prices, as you cannot just compare strike prices—being that the premium is affected by the delta?
Higher delta values are also more sensitive to the price movement of the underlying traded instrument, irrespective of the DTE (i.e. a delta of 0.50 will cause the premium to increase.50 for every $1 dollar or 1 point the underlying instrument’s price increases, times the option’s instrument multiplier [e.g.: 0.5 times 100 for equities & 0.50 times the specific contract multiplier, for futures contracts]).
Nevertheless, options with a closer DTE will experience premium decay much faster than options with a much farther out DTE, due to the increased theta value (for time decay), which makes the premium LESS RESPONSIVE to the price movements of the underlying traded instrument, UNLESS there is a SIGNIFICANT MOVE in price (toward the upside or downside) of the underlying traded instrument.
The Implied Volatility (IV) of the underlying traded instrument (i.e. equity, index, ETF, or futures contract) must also be taken into consideration for the OVERALL COST of the premium, as underlying traded instruments with an IV GREATER THAN 40% will have a GREATER PREMIUM PRICE, than those underlying instruments with a IV percentage LESS THAN (or EQUAL TO) 40%.
ALL OF THESE FACTORS, PLUS OTHERS with respect to the option’s OPEN INTEREST & VOLUME, along with the PRICE ACTION & TRADING VOLUME of the underlying instrument MUST BE TAKEN INTO CONSIDERATION, IF the trader DESIRES to ELIMINATE a HIGH LOSS PROBABILITY from his/her initiated trade, and actually make trading a VIABLE BUSINESS, instead of some “LOTTERY/CASINO” type game, in which case A HIGH PERCENTAGE OF LOSSES BECOMES INEVITABLE.
As the legendary historic trader Jesse Livermore taught, “THE SPECULATOR [TRADER] MUST TREAT TRADING AS A BUSINESS”. And, being that SO MANY PEOPLE see trading as some *”Jump Right In—Minimum Learning Needed, Get Rich Quick” type opportunity, it causes the MAJORITY of these people (gamblers) [not awarded the professional title as a “Trader”] to BLOW UP THEIR ACCOUNTS.
And, in the more extreme cases, this can lead to serious depression & even suicide, as in the case of Jesse Livermore (due to NOT following his own clearly defined rules that made him billions, in today’s time—with inflation accounted for), along with the recent suicidal occurrence of 20-year old Alexander Kearns, who took on options trading, while at home with his parents—NOT FULLY KNOWING WHAT HE WAS DOING.
EVERYONE WITH GAMBLING INCLINATIONS SHOULD DEFINITELY NOT TRADE, UNLESS THEY ARE WILLING TO ACCEPT THE SAME PROBABILITY OF WINS TO LOSSES AS EXPERIENCED WHEN PLACING ANY TYPES OF GAMBLING BETS.
TRADING IS A BUSINESS, & A VERY VERY HIGHLY PROFITABLE ONE, IF THE INTERESTED PERSON APPLIES THE NECESSARY STUDYING & PREPARATION, JUST AS ANY OTHER ENTREPRENEUR, OR AN ATHLETE WOULD, PRIOR TO JUST DIVING RIGHT INTO THE WORK TO BE DONE.
September 27th, 2020 at 6:10 am
What if you buy a monthly expiring in 5 months and you don't sell it till a week before it expires ? Does the monthly become a weekly ? Does it benefit to hold till it turns to weekly ?
September 27th, 2020 at 6:14 am
Weeklies are gamble, pure gambling, good for YOLO