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Trade Options Weekly no longer appears to be around, but there are people still providing the same basic strategy e. Be aware these are high risk strategies.
The first time I saw the weekly trades I gasped. Commission costs would be much higher with many brokers e.
Amazon.com, Inc. (AMZN) Option Chain
The only happy ending for these trades is expiration out of the money. Any sort of hedging strategy would almost certainly eat up all your possible profit. So the short put strike at was at least 3.
In the last 63 years there have been instances of two day drops greater than 3. This particular trade did fine, but it had a bit of a scare.
New Weeklys Now Available For Trading As Of 11/12/2015
However most of those drops were concentrated in bear markets. Note how the frequency of these drops has increased over the decades.
Most of the time, these trades will do fine, but if the market really does go south the position will be in trouble well before the short options go in-the-money. One of the biggest changes in recent years has been the advent and growth of weekly options on the major option exchanges, as previously, most all options were on a monthly expiration with quarterly cycles, always including a front month and second month. So how do we utilize this added tool in the option trader's arsenal, and how do we address expiration weeks in general?
Available Weeklys
First, a little background: Weekly options started trading on the Chicago Board Options Exchange CBOE in and generally have the same contract specifications and similar pricing as standard options. This provides uniformity and also allows traders to easily "roll" weekly options from one expiration to another. Weekly options are primarily available on the major indices and most liquid stocks, but the list of available choices continues to grow.
Similar to the growth in ETFs and options in general, trading volume in weekly options continues to grow.
You can see on the chart below data from the CBOE , the growth in weekly option volume both as an absolute and as a share of total volume. Experiment with small size when you begin trading the weeklies. By Price Headley of BigTrends.