Investing General Discussion
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Sheriff Cad
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And then just like that we're up 1.5% right now for the day, which I'm sure will boomerang back to -2% like yesterday.
I need to just close the stocks app and not look at it for a while, I'm not making any moves anyway. Just fun to watch, kinda like fun watching a plane crash I guess.
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Sanrith Descartes
I was forced to self-deport from the /pol thread
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Sanrith Descartes
I was forced to self-deport from the /pol thread
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Sheriff Cad
scientia potentia est
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Sanrith Descartes
I was forced to self-deport from the /pol thread
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Short version. Options expire at specific dates. The majority expire on the say day of the month (in this case the 21st of Nov). In Dec its the 19th. So come Monday all of that option activity set to expire today will be gone and no longer influencing the market. For purposes of this explanation ignore weekly options.
Sheriff Cad
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Can you not write options to expire whenever you want? Or are there rules regarding when they can expire?
Sorry I guess I could probably go read investopedia or whatever but interested in you guys take.
Blazin
Creative Title
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It would be a lot of typing to fully explain why that matters, options=leverage SPY and SPX trade very high volumes of options, market makers hedge these positions that they are selling to people. The process by how that works can keep the market locked in on a level. That level is created by the bullish and bearish positioning, so there is a price levell that the most number of contracts will expire worthless, like a max pain point for holders. Most options expire worthless. So as we near that expiration it takes a lot more effort/volume to move the market away from that pivot until the month rolls over (the option month not calendar)
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Blazin
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When they expire is part of their fixed structure. We now have them for SPY every day, for a very long time that wasn't true. Degenerate day traders tend to trade the 0 dates we will sometimes right 0 dte (days to expiration) because they are the most volatile as they are set to expire.
Monthlies still have a lot of volume, in options Open Interest is important (this is the number of active contracts) Monthlies expire on Friday (ignoring holiday weirdness)
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Sanrith Descartes
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As Blaz said, its a deep well to explain. For purposes of why today is going to impact the market, over $3 trillion in notional value is expiring today in the options market. The options market directly impact shares of stocks as they are contracts to buy and sell shares of stocks. Come Monday, this $3T in options notional value will no longer be a factor influencing the markets.
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Blazin
Creative Title
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Which brings up the point, individual stock options have less choices for expiration. The big names have weekly expiration, the less traded monthly,, but again just like the index the highest activity is on the monthly.
Sometimes we will talk about Triple Witching, this is when Weekly, Monthly, and Quarterly options all expire on the same day, so Op Ex with extra fuckery.
Sometimes we will talk about Triple Witching, this is when Weekly, Monthly, and Quarterly options all expire on the same day, so Op Ex with extra fuckery.
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Sanrith Descartes
I was forced to self-deport from the /pol thread
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Cad
here is a very basic primer if you are interested in learning some fundamentals of options.Everything Options
Options can be a powerful tool to add to your investing/trading toolkit. They can dramatically increase your risk or they can mitigate it and everything in between. This thread is for discussing options plays, options education and questions. I have been trading options for about 20 yrs now...
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Fogel
Mr. Poopybutthole
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There's other non degenerate ways of using options outside of the usual sell calls/puts. If you're long a stock you can buy deep ITM calls at around 90 delta and get about the same or better return with much less capital then if you just bought the shares.
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Synj
Dystopian Dreamer
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Arden
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Sheriff Cad
scientia potentia est
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