lystn

Hey everyone, Kirk here again from Option Alpha and welcome back to the daily call. On today's call, we're going to answer the question – "How can I tell which option contracts are weekly options versus standard option or monthly option contracts?" First, just to describe I guess generally what weekly contracts are, weekly contracts came about a couple of years ago now. Basically, I like to use them as like the fill in the gap type contracts whereas we used to have just monthly and quarterly contracts in the options market. The weekly contracts came in because people wanted to trade different expiration dates and basically wanted to really pinpoint different times that they wanted to trade different durations that they wanted to trade. These weekly contracts came about eventually, first starting on some of the major indexes, now have pretty much spread to a lot of securities, not all securities obviously, but have grown in popularity because people like to trade in most cases, a very short duration contract all the time or if they want to pin a particular strike price and a particular date in the future, they can use a weekly contract which is a little bit more precise in hedging or speculating in risk for 21 days versus having to do the monthly contract that might be 40 days or 60 days out. That’s where they came about. The misconception though and just to clear this up first because I think this is important. But the misconception when you read about weekly contracts in most websites is that they say that they’re typically listed on Thursdays and then obviously expire the next Friday. Weekly contracts for most securities are already listed now. It used to be that they were listed on Thursdays when they started rolling out and then they would expire Friday and then the next set of weekly contracts would be listed and then they would expire Friday. But now, the exchange is… Because they realize how profitable I guess these weekly contracts are to have available, they basically list these contracts and have them available all the time. Like if I type in SPY right now, I can see at least 10. I think I’ve counted 10 weekly contracts that are available right now heading all the way out until like February of 2018. The weekly contracts are already listed, they’re already available and in most cases, you can find them pretty quickly. How do you find these weekly contracts? It’s actually pretty easy to find. In most broker platforms, when you login and especially on like Thinkorswim or Tastyworks or some of these other major broker platforms, it actually list in the trade tab, in the option pricing table, it will list right next to the contract month and date, it will list and tag it as either a weekly or quarterly or no tag at all which means it’s the regular monthly contracts. Finding these contracts is actually pretty easy. If your broker platform doesn't tag it, there’s probably a setting that you can activate or something that you can click that allows you to tag these or toggle these weekly contracts on or off to look at. The other thing that you can look at is you can look at the dates. Another quick way to look them up is again, to realize that weekly contracts fill in the gaps for regular monthly contracts and quarterly contracts. Monthly contracts expire on the third Friday of every month, so anything that's not the third Friday is probably a weekly contract. When you get to that third Friday of every month, so basically the third week of every month, the monthly contract acts as the weekly contract. It basically replaces it. They don’t overlap. There’s not going to be a weekly contract that expires on the third Friday and a monthly contract. No. The monthly contract basically replaces the weekly contract. Same thing when you get to quarterly options. When you get to the end of years and you get to quarterly options, in most cases, the end of let’s say December or the end of March or the end of September, those quarterly options are going to act in place of the weekly options or just going to continue to carry forward that expiration date. I guess that it’s actually pretty easy to look up. You can look up online and look up some images online. If you do like a Google search on our website at Option Alpha, we’ve got a couple of training videos on weekly options that you can search for as well, so it should be pretty easy. But again, if you have any questions or need any help with it, just let us know. Until next time, happy trading!