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Weeklies, Not for the Timid
For the second time I a row, I’m not going to talk about the election. I find that funny really, because for several weeks I talked about it and figured people were getting tired of my blather. So my last article was on Gap up and Gap down market opens, and the problems with them.
Wouldn’t you know, I got literally 30+ Emails from folks saying things along this line: “this is the most important election in our lifetime and you stop talking about it to say something about gap opens????? You need to get back on track!”
So, I can’t win. If I talk about it, I catch hell, and if I don’t I catch hell. Go figure.
But no, I’m not talking election today. I probably will this weekend, but not today. Today I’m going to talk about “weekly” options. Are they good, bad or indifferent? Let’s chat.
Options are a wonderful tool. I use them very often, and they’re a big part of my toolbox. For most people, they simply use them in one of three ways. One way is to buy a call option on a stock you think will rise. Then there’s those that buy “put” options and they’re for stocks you think are going to fall. Finally there’s the covered call, where you buy a stock, and then sell the right for someone to buy it from you at a higher price.
The bulk, and I mean 85% of all options trades are those 3 basics. But of course there’s many more ways to use options, such as “naked” selling, straddles, condors, butterflies, you name it. I personally only do calls, puts, covered calls and some naked puts.