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The
most common expiry trading strategy used is to buy options with
multiple strike prices. This will increase the chance the stock will
move in their favor and expire in the money before expiration. Usually, the
options premium is very cheap due to time decay.
3 simple rules to
follow in expiry week while trading options
1.) Tighten the horizons as much as you
can
2.) Avoid carry forward of single long option trade into next session, and
3.) Select slightly in the money strikes
especially towards the end of the day
For a bullish view, sell 2 higher strike calls
for every call bought. For a bearish view, sell two lower strikes puts for
every put bought.Make sure there is at least a difference of two
strikes between the ones bought and sold and there is an absolute stop loss
mechanism deployed as an exit strategy.
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