you need to understand delta and theta if you are going to trade options, start with the basics. If I tried to explain why "long butterfly" to you, you would probably be confused. You also need to know how to price options with black scholes formula, not in your head but understand how pricing is derived/created. Most new traders get killed by theta which is time decay. This becomes a major issue when expiration approaches. Theta on the august spy 108 calls is - .1041 or 10.41 per call so that if the stock is unchanged at the end of the day you lose 10.41 per call. Say you bought a 10 lot you now have lost 10.41 x 10 = $104.10, at the end of one day if the stock is unchanged. On the other hand if you are short you just made $104.10 for taking the other side. This is great until spy rallies 3% and now you are losing money because you are short calls and the mkt is moving against you. I could go on and on. You should get a paper trading account with think or swim, etc and go thru some scenarios. Most of the option guys here are cool and will help you if you don't act like a douche. If I gave you $100,000 to invest in options only where would you put it and why.
here is the pricing for spy 108 call figure this out yourself and save yourself a few bucks. Things learned on your own no one can take away from you,. http://www.optionseducation.org/quotes/default.jsp http://www.optionseducation.org/advanced/black-scholes.jsp
ok what am I supposed to figure out? I see the changes in theta as it gets closer to expiry. also, you should change the days to expiry to "5" since there are only 5 trading days left right?
What everyone else said above, the lambo/camaro is a great analogy. Pull up an identical spread with monthly vs. weekly and look at your negative gamma difference. If you don't know how to do that or what gamma is then study until you do. Everything is sped up on weeklies and when you need a good fill the most is when you are trying to close a losing trade. That is when the bid ask spread of weeklies hurts you the most.
OEX weeklies. usually about 15 points OTM. In the last month or so the premium has not been good and the premium has been about .40 In april/may, the 85% or better probabilities were yielding .70-1.00 in premium for the same OTM spreads. In the Snider system, you hold spreads till expiry and just keep the premium you received when you opened the spread. If the market moves sharply away from your spread, then you can close for a profit and open another position with the same 85% rule.