Day Trading Weekly Options for Massive Gains (High Risk)
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Day trading weekly options can be an immensely lucrative strategy, as it’s possible to 10x or even 100x the money put into these strategies. But those returns come with high risks.
In this video, I explain why traders would want to participate in short-term / weekly options, including real historical option data to visualize how short-term options perform relative to longer-term options at the same strike price.
Weekly options can provide such huge returns in a short period of time because short-term options (little time left until expiration) are hypersensitive to changes in the stock price. If you buy a short-term option and the stock price moves towards your strike price (or through it), the option’s value will increase immensely.
But at the same time, if you buy a short-term option and the stock price moves against your position (such as a decrease in the stock price after buying a call option), your position will lose money quickly.
Fortunately, buying options has asymmetric return potential: your risk is limited to what you pay for the options, but your return potential is virtually uncapped.
Because of this, you don’t need a high rate of success to produce profits when buying options, especially short-term options.
In this video, I cover the main reasons why traders like to buy short-term weekly options. Be sure to check out the rest of the series to learn even more.
Be sure to leave a comment down below with any questions you may have!
=== RECOMMENDED VIDEOS/RESOURCES ===
Call Options 101: https://youtu.be/fUZHmJAvN30
Implied Volatility Explained: https://youtu.be/H-NHZq-skFo
Stock Options Trading 101: https://youtu.be/3bELT5FZCic
Why Early Exercise/Assignment is Rare: https://www.youtube.com/watch?v=7pTb1a5IgKM
Options Trading For Beginners (PLAYLIST): https://www.youtube.com/playlist?list=PL33AZa4cv-o58ldr-5zSn4ROx4SZG7Jyo
tastyworks Tutorials (PLAYLIST): https://www.youtube.com/playlist?list=PL33AZa4cv-o56a2BO3jpK_PBUFe3FdvxP
Option Pricing EXPLAINED: https://youtu.be/-nnJ4pMBaxA
Options Trading 101: https://youtu.be/3bELT5FZCic
Link do vídeo
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A bit of a different video than what I've put out in the past, but it's time to start talking about a different, more high-octane arena of options trading. Please note that while the examples in this video were not intraday trades, the same exact concepts to buying short-term options and closing the trades within the same trading day. Let me know if you have any questions!
Hi, to prevent the rapid time decay and the conseguent very high possible losses in short term strategy options, is it ok to insert a stop loss limit to the call? In this manner, I could decide the fixed maximum amount of money loss. Is it right? Txs
What do you use to watch tape and charts on daily options? Sterling has nice feature to combine strikes into one time and sales window but no way to graph options which is quite limiting on day trading options. The option volume seems more transparent than the underlying equity because there aren't dark pools.
If my option expires ITM do i make money?
If anyone knows the answer to this please comment: If I buy a call option (i.e. 2,000 shares of a stock at $55 a share) and it goes up to 57% Would I still be able to sell due to the large amount of shares I have?
Worst video ever. Cardboard has more substance. Thanks for telling us hypothetical with obvious info
Weekly credit spreads in the money, when sold early to minimize losses can be a hell of a tool.
Thanks for this great video it has been helpful to us. As an investor, it's almost inevitable that you're not going to experience ups and downs along the way of investing for yourself but trading with an expert who would guide you in making huge profits is the best. Think about Mrs Kramer Rosalina
Do you have videos on how you find these stocks/options to invest in?
Love these lottery tickets, they are fun as long as playing w what you're cool loosing. I usually go otm 30 delta, it's like a super lottery ticket… So i dont lose too much. What delta do you like? And have you tried selling weekly IC's? I like 5 dollar wides.. Very smal risk and feel your prob goes waaaay up
Hey Chris, thanks for the great video. You mention in the video that you'll post more on this series. Have you done that yet? I couldn't find them on your page. It would be great if you could point me towards them.
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hi can i ask if i can sell my either 3 or 25DTE call option within a day? instead of buying shares
for day trade?
Great and concise video as usual! Keep'em coming buddy! I always value your no BS insight!
Ok question. I got that short term options is best but let say the share price is $50. Is it more profitable to buy a $40 otm call or $60 otm call ?
This is a really clear video exactly what I needed. Thanks so much projectoption!
Great comparisons, helped me visualize and learn faster. 👍
where did you get the options price data to create the visualizations in the video?
Good video.
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The whole reason I would want to do options day trading is to get $25,000 or more! I don't have $25,000 just to put in there and let it sit on Robinhood! I'm pretty sure you got to maintain 25,000 in your account am I correct? I've studied up on it and come to find out I got to have $25,000 in my account just to do it?!!
The background music was distracting.
Great video! Thank you for this, very informative and explained in a very clear and understandable way.
The music is so good, I was jamming until the guy's voice came out, it ruined the beat
What kind of success are you guys having trading weekly options? For those of you finding success what do you attribute most to your success?
What are you listening to in the background? I had to pause the video to make sure I wasn't trippin lol
This has been my play and though I’ve blown up an account (of$900) it has paid off greatly. Love your teaching style. Great video.
Sorry, just need some clarification. From what I understand in this video, a high strike price is always better than a low strike price when it comes to a call option? high strike price has a cheaper premium and it gives a higher percentage return compared to a lower strike price. But I always hear people say stay away from deep out of the money strike price, can someone please explain why because when I checked robinhood options, the higher the strike price, the higher the percentage gain was, and that percentage decreases as I scrolled down to the lower strike prices. Also, if the stock goes up, won't all the call options go up no matter the strike price? since the purpose of call options is to bet that the stock will go up, that means when a stock goes up, everything will go up. I don't see any reason why some call options would go down since they are all on the same bet. In this case, only the put options should go down, not the call options. I'm new to options, please help. Thanks 🙂
@projectoption what if we couple the set up whit a sell position ( in shorting call by long the positon) with size which cover the loss of option set up if it goes against your direction?
Thanks good video
I day trade weekly options, mostly on NIO and I've been very successful 🙂 Great video again, keep up the good work!
Hi Chris, thank you for this, I am looking for insight for day trading – why day trade options vs shares. I heard from a trader that day trading options require that you are able to day trade using the stock alone and in some cases better to use the stock. I understand that there there is inherent leverage in using options, and accelerating delta from OTM options, and ability to control more shares of a high priced stock but that comes at a cost of the premium paid. Wouldn't trading shares provide a higher risk/reward assuming you have bank to afford "100 shares" or more using a tighter stop loss say 0.10 cents on a $10 stock.
If say for a stock $10, you have the bank to control 100 shares at $10 ($1000), if it moves up $1 dollars ($100 P&L), on a 0.10 ($10 risk) stop loss at a good entry, that's 10:1 Risk/Reward vs buying a 45-25 Delta Stock Option (or enough contracts of it to match the effect of 100 shares) – which could have inflated premiums due to increased IV, what i've seen so far is that you may not able to obtain such a high risk/reward with that kind of move on the derivative. The Gamma helps accelerate the delta of a contract, but you gotta deal with theta decay as well on a same week option.
And using the SPY in the video as an example:
Options:
1) 3-DTE 250 Strike option – Cost $468, Max Price (SPY $260): $1208 ~ 158% Return
Shares:
2) SPY is at $242 ~ controlling 100 shares with $24,200
Stop Loss: $5 ~ $500 (similar to 3-DTE 250 Strike Option), Max Price (Spy $260): $1800 ~ RR: 260% Return
Am I comparing apples to oranges since Shares have 1.00 Delta, and The 250 Strike Option is probably 25-40 Delta, and a better comparison would be to 2.5-4x the Option Cost and Return? And, I am making an assumption that you'll lose all the 3-DTE 250 Strike option Premium where as say if you cut cost at 50% stop loss, then that would be equivalent to buying say 50 shares of SPY when trading shares at a $5 stop loss,
The Option Premium is a hurdle, but I presume, that if you wanted to control more delta of the underlying, it's possible with increase the capital and buying more contracts.
I've been doing this strategy and it's working. One question I have is once you go WAY outside of the money…the value of the option actually grows slower than some options that are closer to the money but still OTM.
What is the factor that controls this? Vega? IV?
In summary Is this just a call option that only runs for 8days and the only time you can buy one is on the third Friday of the month?
Many thanks, I have been researching "options income strategies for monthly cash flow" for a while now, and I think this has helped. Ever heard of – Eeyarah Mysterious Eradicator – (should be on google have a look ) ? It is a smashing exclusive guide for discovering how to unlock an effective options trading method to win fast without the headache. Ive heard some amazing things about it and my mate got great success with it.
Thanks so much for your great videos! I just can't seem to get my head around IV! I watched your video on it and this one too. I day trade options typically. Sometimes I win sometimes I lose but I don't understand why. Today I bought a put on AMZN at UL price 3003.00 it cam down a little went up by about 10 or 15 dollars then heavily broke down. I bought the monthly options that expires in a little over 2 weeks. I had a $20 move in my direction at the time I exited and lost money!? Do I need to just buy longer dated options? Or is it because of IV? I just can't seem to understand if I have a delta of 30 and the price goes 3 dollars against me why does it have to go back to past where I entered before I break even?
I think one more thing to clarify to viewers that confused me is why selling a call @ 250 would have less gains than selling a call @ 260 when the price of the stock is just above 260 …isn't there more demand for the 250 call since it's deep ITM and has high intrinsic value therefore potentially higher gains…or are you saying that all of far OTM calls have higher gain because of the initial cheap premium ? And is that always the case?
52 dte had 80% gain wow …that's still better than most investors 😂 …I'm not with that 1-3 dte risk
Thanks 👍
I have an important question I need answered, if someone could help me, I'd be very grateful:
I purchased a weekly option yesterday, and it expires Friday, the 30th of October.
Now, is that option ONLY REDEEMABLE DURING THAT WEEK?
Or, is it redeemable ANYTIME between NOW and THEN?
Also, why do Options with more time left on the contract react less volatile than shorter options? I'd ASSUME the opposite, being as the Options with more-time left have more opportunities to INCREASE FURTHER IN VALUE!!!!!
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Tell me this if I buy an OTM $50 call for $1.25 then the stock moves 7 dollars in the money then I buy an OTM 55 put can i lose?
Not sure how you get to a 33% success rate for BE, with 100% avg win, and -50% loss? e.g. start with $1000; 1st trade -50% loss = $500, 2nd trade 100% win= $1000. that's a 50% required success rate.
Do you ever trade daily exp options? I've been playing around with them a bit this last week, they've made great money BUT, it's obviously extreme risk because 3-4 hours before EOD they basically become worthless.
I use to trade monthlies but found they didn't move too much. I kind of want to get away from playing the daily too, just way too much risk. Weeklies seem like the best middle ground?
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How do you pick the right strike ?
Can we be sure somebody will buy the option off me hours before the expiration if I am in the money?