WIN with options Weekly Income Now by chris verhaegh

Why Weeklys Work

  • Weekly options premiums are generally lower than those of standard options
  • Weekly options may match hedging needs more closely than similar standard options
  • Weekly's carry a much lower extrinsic value than plain vanilla options
  • Weekly options get even cheaper when there are not one but two barrier prices
  • "Knock-In" Weeklys are ideal for speculating huge moves
  • "Knock-Out" Weeklys are ideal for speculating small moves

Trade in the Zone

Barriers come in two types. We call a barrier "above the current stock level" an up barrier. If it is ever crossed, it will be from below. We call a barrier "below the current stock level a down barrier, if it is ever crossed, it will be from above

Weekly options on stocks create opportunities for investors that are not available with standard puts and calls, usually with lower premiums than standard options with similar strikes. The payoffs, being a function of both the strike and the barrier, can be complicated. The pricing characteristics, captured by delta and gamma, can change dramaticaly through time, and exhibit discontinuities.

Weekly Options Basics

Up-and-In
Underlying asset needs to move up and beyond barrier price for the barrier option to become active.
Up-and-Out
Barrier option becomes de-activated if the underlying asset moves up beyond the barrier price.
Down-and-In
Underlying asset needs to move down and beyond barrier price for the barrier option to become active.
Down-and-Out
Barrier option becomes de-activated if the underlying asset moves down beyond the barrier price.