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The Use And The Abuse Of The Weekly Options


Options trading is becoming more and more popular every year. The options become more liquid and more traders use them for hedging, speculation, income etc. Weekly options, first introduced by CBOE in October 2005, are one-week options as opposed to traditional options that have a life of months or years before expiration.

Not every stock or index has weekly options. For those that do, it basically means that every Friday is an expiration Friday. That opens tremendous new opportunities but also introduces new risks which can be much higher than "traditional" monthly options.

 

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