Market Measures

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Weekly Strategies

Market Measures

Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.

When looking to place a trade, we will normally place them around 45 days until expiration. However if we are trying to increase our number of occurrences, we may look to place a trade in a shorter term, weekly expiration cycle. When doing this, we take on more gamma risk and collect a smaller amount of credit. Today, Tom Sosnoff and Tony Battista look at two different weekly strategies, a 1 Standard Deviation Strangle and an at the money Butterfly. They find out that the strangle performs better and want to take the study one step further to see how it stacks up against a longer term (45 Days to expiration) strangles. The guys find that if you are using a similar number of contracts, the additional credit that you receive from the longer dated options makes all the difference!

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