Forty percent of stocks in the S&P 500 will release theirthis week. How can we take advantage of this increase in volatility? Which option should we choose?
The Research Team creates a table that compares Weekly Expirations to Monthly Expirations -- one isn't better than the other since there are tradeoffs involved with each.
- High possible ROC
- The overall possible p/l is smaller; the daily P/L though is larger
- Large moves in the stock require quick management
- Lower possible ROC
- The overall possible profit is larger; the daily P/L is lower
- Large moves in the stock require less of a “hyperactive approach”
A final table then shows a comparison of strategies along with their approximate.