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Friday, April 18, 2008

Options Expiration Tips

Yesterday, Tom Sosnoff from thinkorswim discussed some interesting nuggets about Options Expiration and Earnings. He highlighted 10 tips, and here are some of them:

-Market usually gets a huge move on Tue or Wed during the week of expiration and then remain rang bound for rest of the week

-If there is alot of buying pressure during expiration week, trend is likely to continue into the following week. Same applies for selling pressure

-Wed-Fri of Options Expiration week has buy side pressure historically. About 66%-75% of the time is bullish

-Monday after Options Expiration week is most liquid day

-April tends to be a bullish month around Options Expiration week

See here to get the rest of the tips. As always, these are based on historical data, and history does not necessary extrapolate the future perfectly. But it is interesting to be aware of these...


Blogger Tony Chai said...

Hi SOT :

Thanks for sharing these tips. Did not really realize them.

Only know that options in the last week of expiration would carry little time value thus they might present some bargain hunting for options buying, but of course you would need to dispose of them (hopefully with a profit) before expiration date.

Yours Truly,

Tony Chai
My Options Trading Blog

4:49 PM  

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