S&P Option Expiration Trades

Discussion in 'Index Futures' started by TradePlayer, Mar 17, 2011.

  1. This is a thread regarding past price action and natural tendencies with the Option Expiration day. If you can't handle that this pattern does exist, please do not waste your time trying to write a clever comment.

    There are two trades surrounding the Options Expiration day, one long and one short. The first has happened 73% of the time over the last 14 years. On the night before Option Expiration (tonight), from 11:30PM Eastern until 9:29AM Eastern the market has risen an average of 4-6 points 73% of the time.

    A stop of 5.5 points and a target of 6-8 points works very well for me. Yes, sometimes you get stopped out- this is a pattern that occurs 73% of the time- not 100%.

    IF (and only IF) this trade is successful, there is another profitable opportunity in the Options Expiration Open that occurs 75% of the time. Short at 9:30AM Eastern for 30 or 35 minutes with a 4 point stop-loss and a 5.5 point target. This trade is largely dependent on the first trade's success and the more profitable the first trade was, the more profitable this trade has been.

    As I stated, this is a 70%-75% pattern (natural tendency), not a 100% one. There are other factors that dictate what happens. If the setup doesn't work out tonight, just remember this tendency on future options expiration trades.

    Happy Trading
  2. This trade worked out perfectly and was even more profitable than expected. Many outside events do impact the success of this trade, but remember that the natural tendency is that 70%+ of the time the trade has been successful with these very simple rules.