If you're like us, and watching the SPY intraday, you will have seen this one on Friday 10/21/2022. The first 15 minutes of the trading day gave us this MACD divergence. At this timeframe, nimble traders took a chunk of change on call options.
As usual we look for out of the money options, with low premiums (expiring on the same day 10/21/2022), and trading at 10c or under.
We found the SPY 374 calls, expiring 10/21/2022 with premium at 10c, and entered the position. Within 25 minutes the price shot up to over 50c. A quick exit netted us 4 times our money as the lower timeframe MACD turned down.
If you took your eyes off the ball you'd have given back half this gain within 40 minutes of entry.
Not a bad start for a Friday. A possible rentry can be seen below on the same 15 minute chart when the MACD turns back up. The same 374 calls were trading around 6c this time.
The calls were over 1.00 later in the day, although exiting on pullbacks would likely have netted you another 5+ times your money.
The Options Hunter approach focuses on divergences between the MACD and the price action. We don’t employ other indicators such as RSI, Stochastics or Bollinger bands as we keep our approach simple, straightforward, and repeatable
What are Weekly Options and Why Do I use them.
Weekly options are a great way to make money, but it can also be incredibly volatile. Trading weekly should only really be considered for experienced traders who know what they're doing because there is no guarantee that any profits will even exist in the first place!
How do Weekly Options Differ from Monthly Options?
Weekly options and monthly options are similar—the primary difference between the two lies in the expiration dates. Monthly options expire every month on the third Friday of the month, whereas weekly options expire almost every Friday and are issued on Thursdays.
Traders who were previously limited to just 12 options expirations each year with monthly options can now capitalize up to 52 expirations by adding the tool of trading weekly options to their trading portfolio.
Weekly Options are More Cost-Effective than Monthly Options
Weekly options are the best way to invest in a stock when you need maximum profit within quick time periods. They provide guaranteed market moves that last only for max two days, which means there is no risk associated with these trades because traders can always sell them before their holding period expires and make back all their money plus some extra!
Weekly Options Listings Feature Popular Stocks and Indices
Weekly options are less expensive than shares of the stock and cheaper than standard monthly ones. This is because traders have only a couple days to wait for their underlying stocks price prediction before they expire, so there isn't time sensitive premium in play here with weekly option trades - though this does mean quick opportunities can present themselves more quickly at times! The increased volatility within your holding period also
Weekly Options Maximize Profit Potential
Weekly options allow traders to profit during any kind of market environment. The short-term nature of weekly options trades calls for efficiency in a fast-paced stock market that can be highly unpredictable for long-term investments. With weekly options trades, traders can benefit from buying cheaper options and then selling them for more than purchased within a short period of time.
Regardless of the price movement, it is always possible to see triple-digit returns with weekly options buying. Unlike stocks that only benefit investors if the stock price increases, weeklies let traders benefit regardless of the stock price direction.
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