Flexing Your Muscle: The Power of Options Close to Expiration

  • Michael C. Thomsett

Abstract

Traders tend to think of time as the problem with options trading. “Time works against you” and “expiration is a big risk” are common beliefs due to a popular bias in favor of long positions. These problems with time are very real if you restrict your trading activity to the long call or put. However, when you use short options or combinations of long and short, the landscape changes drastically. Trading options close to expiration as part of a swing strategy can turn time decay into a great vehicle for generating profits and reducing risks.

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Copyright information

© Michael C. Thomsett 2013

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  • Michael C. Thomsett

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