enter Thursday 3:55pm strangle/straddle with Friday weekly expiration (1 day trade)....does anyone trade the highest possible profit option straddle or strangle trade? Meaning, wait until 3:55pm EST on thursday and then buy a long straddle or buy a long strangle?...as they expire that Friday next day and the trade is only 1 day, it has the most movement and profit potential? does anyone doe this, done this and what stocks are good for this? SPY? BAC? GLD? QQQ? etc...
terrystips (only mentioning this for the free info!) has a portfolio where-in he trades weekly options on SPY with either a diagonal (limited expected move) or a strad/strangle (greater expected move). he opens on thurs and closes on fri. he has posted some positve results on his free blog, looks like about 20% possible returns, against what kind of losses??? also forex/forex has posted here on e/t some QQQ strad/strangle trades, maybe he could summarize his current thinking on these trades.
During August I posted a series of live QQQ weekly option trades using a similar strategy, except I opened the trades from Tuesday to Wednesday for the Friday expiry. All trades were held for one day, if held to expiry the returns would have been much higher than the +112% I ended up with, the overall market was down about -10% during the same time frame. Two of the five trades were strangles. August 2011 QQQ Weekly Option Trades - Final Results EDIT: I believe with the QQQ options you can trade them till 4:15pm EST.
I use to do it on Bidu. It's really more of a gamble then a trade. But if Bidu was up at Thursday close I would buy the nearest put or vice versa. However, the options were still quite pricy so instead I would wait til opening Friday morning and if she gapped up I would jump in on the put or vice versa. I am no longer trading Bidu now (moved to ES) but she is a great stock to trade options on. I was 5 for 8 trading exp. on Bidu. Had a 641% and a couple 200 % plus winners, two total losses(both were up 100%, I got greedy, . ) and one partial loser. But I made out pretty nice overall. There's nothing like buying options for pennies and selling them for dollars.
You discovered it from the long side, but premium sellers do that all the time by selling first and buying later.