If you are looking for really big, really fast options profits—and, really, who amongst us isn't—then consider buying expiring options.
In some cases the answer is yes, but that risk is due largely to the fact that during the last week before expiration, very close-to-the-money options can make dramatic moves in value very quickly-often within one or two days.
The reward, however, is that buying these kinds of options can generate some of the biggest home runs you'll ever get.
When holding an option through expiration date, are you automatically paid any profits, or do you have to sell the option and pay commissions?
And, unlike earnings season, which only happens quarterly, expiration cycles take place monthly, so you get a dozen chances a year to take advantage of these last-minute profit opportunities! The key to success in this strategy is to buy on weakness in the option price.
But be forewarned; you can incur a fair number of losses with this strategy, but just one big move in the index price can give you the jackpot of a lifetime.
You might try testing these trades on paper for a while to see the results of this type of play. In expiration plays, you are betting on surprise volatility swinging the price of a stock or index—and, thus, the option—into your favor. Then he connects wit….
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