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CBOE has decided to change the kisting of SPX weekly options.On May 31st, rather than list 1 set of weekly options on the Thursday before expiration, the CBOE will list 1 month of weekly expirations for trading. Then following the expiration of the June 6 contact, the CBOE will add the July 13 contract. This means that, at any given time, there will be 4 weekly options trading, and that, eventually, every weekly option will have had an approximate 30 day life span.
yes, this is my understanding - weekly options that expire in 30 days.
Idea Number Two..... Don't....
Idea Number Three... Don't...
Did I say Don't.....
Yes it monthly but guess what... you would now have 4 active futures.... Which week is the one where the volume is going to be played on? Could leave you hanging like an attempt to roll over....
sp - it is fair to note that one can not buy SPX, it is just an index and it does not pay dividends
Like! Always wanted more expiration options. Too bad it's on SPX and not SPY. I don't like Euro Options.
SPX Weekly Options - New Listings
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CBOE has decided to change the kisting of SPX weekly options.On May 31st, rather than list 1 set of weekly options on the Thursday before expiration, the CBOE will list 1 month of weekly expirations for trading. Then following the expiration of the June 6 contact, the CBOE will add the July 13 contract. This means that, at any given time, there will be 4 weekly options trading, and that, eventually, every weekly option will have had an approximate 30 day life span.
It sounds like they are monthlies not weekies, only they will now have one settle every week. I'm I right?
yes, this is my understanding - weekly options that expire in 30 days.
Sounds to me like monthlies also, with one expiring each week. Just another way for the CBOE to alleviate you from some of your cash? There is probably a strategy one could employ. Any ideas?
Idea Number One..... Don't....TampaJake said:
Sounds to me like monthlies also, with one expiring each week. Just another way for the CBOE to alleviate you from some of your cash? There is probably a strategy one could employ. Any ideas?
Idea Number Two..... Don't....
Idea Number Three... Don't...
Did I say Don't.....
Yes it monthly but guess what... you would now have 4 active futures.... Which week is the one where the volume is going to be played on? Could leave you hanging like an attempt to roll over....
Not to worry, Otter. I am not an options person. My best option is to not let options take away my option of making money. But nothing wrong in letting others come up with some scheme so the rest of us can poke some holes in it.
Realizing that I am just an old coot, and I probably just don’t get it, I see a problem. If options soon have expiration dates that occur so frequently, one might mistake them for an adequate substitute for the underlying. But options, no matter how frequently they might expire, are derivatives. At best you have a ‘right to acquire’, but that is rather like a renter who might have the right of first refusal, or a credit towards purchase, as opposed to someone who is actually paying a mortgage.
I see a temptation to think you might get by without the bother of actually owning stock. Now, I do use options quite a bit, but it is in conjunction with stock ownership, not in lieu of it. I realize that some never intend to own stock when they sell their options, and this is a recognized method for earning a profit. But this can on occasion lead you to owning the underlying. Moreover, there is some virtue to owning shares. One, you get to collect dividends, two, once a year, they laughably allow you to vote, and three, you can get to share in the capital appreciation of the stock.
sp - it is fair to note that one can not buy SPX, it is just an index and it does not pay dividends
OF, - I clearly see that SPX is not just any stock,
and that it is often used by people who have a portfolio such as mine, as a
hedge in case the market declines. (I don’t do this myself, since I see the
market’s general inclination to rise as my hedge, and I’m willing to forgo any momentary
gain on the decline, for the lack of a loss when the hedge doesn’t work.) The
point, however, isn’t the use these instruments might be put to, but the fact
that the possible popularity of them may well led to the expansion to a whole
new class of monthly options that roll on a weekly basis.
Like! Always wanted more expiration options. Too bad it's on SPX and not SPY. I don't like Euro Options.
We will cross that bridge when we get there. Meanwhile I am wondering if the VIX will become more "toothless". The new weeklies will draw volume from the monthly and they are not part of the VIX calculationspshapiro said: OF, - I clearly see that SPX is not just any stock, and that it is often used by people who have a portfolio such as mine, as a hedge in case the market declines. (I don’t do this myself, since I see the market’s general inclination to rise as my hedge, and I’m willing to forgo any momentary gain on the decline, for the lack of a loss when the hedge doesn’t work.) The point, however, isn’t the use these instruments might be put to, but the fact that the possible popularity of them may well led to the expansion to a whole new class of monthly options that roll on a weekly basis.
Your thought about the VIX is interesting. I do see that it could effect the calculation and people’s response to the fluctuation if this type of option gains popularity. Not every new offering catches on, remember the binaries.
What bothers me is some people see options as replacements for stocks, and though they have some things in common, they aren’t the same at all. Suppose that FB, would it starts trading options on Tuesday, has a monthly that comes due each week. With the pressure from the new issue and the fact that there is no dividend, I could see a possibility that the options could trade as much, if not more than the stock. I could imagine hearing it said that the options are ‘safer’ than holding or shorting the stock. And in some sense it may be true that you can limit your risk, but options are a right or obligation to do something in the future, where stocks represent present ownership of future P&L’s. There is a difference, but I do acknowledge that if these new options are not reflected in the VIX calculation, it will effect how people perceive future opinions of ‘fear and greed’.
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