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Trading Weekly Options + Online Video Course: Pricing Characteristics and Short-Term Trading Strategies by Russell Rhoads

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CHAPTER 3

Weekly Options on Equities and Exchange-Traded Products

Once short-dated options were introduced on stocks—exchange-traded funds (ETFs) and exchange-traded notes (ETNs)—their popularity and volume growth came very quickly. Initially only a handful of equity products had short-dated options available, but this list has quickly expanded to include over 200 equities with short-dated options available. In addition to options that typically are listed on a Thursday to expire the following Friday, there are a number of stocks and exchange-traded funds that have options expiring several weeks in a row, much like the format used for index options.

Stocks

Among the early stocks that had weekly options listed were high-volume traders such as Apple (AAPL), Google (GOOG), and Amazon (AMZN). The list would often change from week to week based on which stocks may be in the news or have an earnings announcement scheduled for the following week. The various options exchanges would list short-dated options based on their belief of which stocks would generate interest in trading options with just a few days to expiration. A good example of this, and an interesting stock that would continuously show up on the list of stocks with weekly options, was on BP p.l.c. (BP), previously known as British Petroleum.

Typically, BP would not have been a very volatile stock that would have garnered attention of option traders. It certainly would not have been the sort of stock that short-term traders ...

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