Secret Behind Making Money with Weekly Options
Trading weekly options is becoming more and more popular among personal traders and investors. Using certain types of option trading strategies can help option traders do quite well with weekly options. But there are certain elements of the weekly option that are important to keep in mind if one intends to utilize the best strategy they can find. One of the greatest secrets a trader can learn about weekly options is the power of Time Decay.
If I think of when I grew up in Northeastern Ohio, I remember walking through the woods in the Park system. The ground was always covered with leaves and come fall, when all the leaves fell, spring would bring 3 to 6 inches of decaying leaves that would bring nutrition to the family vegetable garden. Now, decay of these leaves is caused by bacteria and 
fungi that “decompose” the leaves from what they were. Literally, the leaves decompose, change form, they no longer stay what they were, but their elements break down into carbon-related elements.
After the same manner, weekly options are like the leaves I used to walk through. Whereas bacteria and fungi were the catalysts to breaking down leaves on the forest floor, time is the catalyst that causes the decomposition of the value in the weekly option.
The options are born on Thursday with a certain value and they live until the following Friday where they expire—valueless. They live for 7 days. Each day the options start to decay, we call this (time decay). As they get closer and closer to their expiration they also grow more worthless. Unlike the monthly options, the value of these decay at a much faster rate. Knowing this important trait of a weekly option, we can now ask ourselves this question:
How can I use the extreme time decay trait in weekly options to my advantage to make money?
The secret behind this is to make your profit in the beginning of your trade, not the end. Many option strategies are designed as a debit trade that costs you money up front hoping you will make money later on. These will not work with weekly options because if the trade costs you money upfront, then TIME DECAY is working against you every day now.
Think about it. You have given your money to someone and now you are hoping the markets are good to you and move in your favor so that the value of your option increases. With weekly options, if you are wrong just one day, not only does the value of the option decrease as the market moves against you, but time decay is also playing a big role. Now you have to hope the next day that the market goes in your favor. Not only in the direction you want, but now it has to do even better than when you started so that your option increases in value—but you still have TIME DECAY also working against you. Those are some huge obstacles to overcome if you are interested in trading weekly options.
How would you like to be the person receiving the money instead of giving it?
Let the other person gamble on the markets and you get your profits up front. You let the options expire and use TIME DECAY to your advantage. This is the type of strategy you need to use if you are going to make TIME DECAY your ally. Now you are recipient of the profits while someone else sweats out the market as it is stacked against them.
