Your Options on Options

This article was originally published March 18, 2000.

Most of the time, options don't matter. Most of the time they exist in their own world. But in expiration week, they matter plenty, which is why I dwell on them.

So, why do they become the tail that wags the dog during expiration week? What makes them so powerful?

First, the only reason I even know this stuff is because I used to do nothing but trade options when I didn't have much money. I took all the money I had saved up for law school and rolled it into options and made a ton of money that I then used to pay my tuition. I got started early on in the game because I loved the leverage and excitement. It is because of years of trading that I now know things like when a squeeze might occur or where a pitched battle might take place. ...