One topic discussed yesterday was the potential expansion of the weekly options offering to include options that expire every day of the week, starting with the seven-day term that has proven so successful (and is nearly 25% of the typical daily volume now).
While the concept of one-day options has been floated a few times, they have failed to pick up wide support because many in the industry feel such a short-term focus can bring problems, especially in volatile markets or amid rapid 'gap' moves. Yesterday's discussion was about listing options that expire in seven days, and listing them every trading day, so you end up with contracts available to trade that expire every day for the next seven days, permitting a very extreme precision on options timing. This might allow a trader to short options ahead of earnings and be long a straddle after earnings all at the same time as a package (that four-way straddle swap will need a catchy name). If we get these contracts (and I bet we will), the entire concept of 'expiration friday' will become a bit of a relic we can explain to our grandkids.
Another interesting issue was that yesterday's Chicago Board Options Exchange (CBOE) floor technical problems were taking place at the same time that CBOE management were taking the stage for a panel. Of course the first question was 'whats going on with your floor?' and while the response was a politically safe 'a software glitch which will be corrected shortly' (and was), the event certainly gave many of the attendees something to talk about. While all the stock and ETF options listed on CBOE are available to trade on other exchanges and therefore did not really cause any problems, the inability for traders and banks to get access to the top tier proprietary SPX and CBOE Volatility Index (VIX) options is a significant issue. One exchange leader I spoke with suggested another exchange should be selected to pick up the listings in just such this case.
OptionsProfits can be followed on Twitter at twitter.com/OptionsProfits
Henry can be followed on Twitter at twitter.com/henryschwartz
EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV