Weekly Options Going Mainstream

• Posted by Adam Warner
• on November 16th, 2010

Looks like we have a hit product on their hands. This from the CBOE.

• Since last summer when more Weeklys were listed for trading (35 options classes now available), total Weeklys options volume at CBOE rose from 1.4 million contracts in June to 5.8 million contracts in October. Volume in Weeklys index options at CBOE is up 40% for the same period.

Now if that volume simply moved out of “regular” expiration options, CBOE would simply be robbing Peter Najerian to pay Paul Najerian.But that’s not at all the case, average overall volume continues to nudge higher over time as always.

There’s nothing otherworldly about Weekly options. They are the same as regular options, they just make every week Expiration Week! Expiration can goose moves as options get trapped, so theoretically we now have that possibility 52 weeks a year instead of 12. But on the narrow focus of you simply trading a product, I wouldn’t get carried away with that. Just know any option with under a week to go has relatively low premium for the seller and ergo extra risk attached.

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