Tuesday, April 19, 2022

SPX Weekly Options Will Soon Be Available with Expirations Every Day of the Week

Yesterday, the CBOE listed the first batch of SPX weekly options with a Tuesday expiration, starting with the April 26th and May 3rd expirations.  Interest is strong, as halfway through today’s session, there were already more than 12,000 contracts traded for just the April 26th expiration.

Readers may recall that the CBOE began to expand from monthly SPX settlements to add weekly Friday settlements back in 2005 and then began to embrace a broader scope of underlying issues with weekly options in 2010, including both VXX and VIX weeklys.  Once the Friday weeklys took off, the CBOE added SPX weekly options that expired on Mondays and Wednesdays.  In the intervening decade or so, weekly options have generated a substantial following, being used for event-specific hedging, short-term trading and day trading.  Weeklys showed their market power when organized retail traders of meme stocks used weekly options to trigger gamma squeezes that dramatically spiked the prices of the underlying stocks.  For more information on this, check out an informative CBOE article, How Meme Stocks Impact Options Trading.

While I am not likely to use this space to advocate day trading weekly options, these options have clearly added significantly to the trading toolbox.  Looking ahead, on Wednesday, May 11th, the CBOE will complete the suite of SPX weekly options, when they list SPX weekly options with a Thursday expiration, likely targeting May 19th and May 26th at the outset.

When this happens, in less than a month, there will be SPX options expiring every day of the week!

The implications for traders and investors are substantial.  You can have options that expire on every day there is an important economic data release, earnings report, FOMC meeting, election, astrological market timing signal or whatever floats your boat.  For those who trade calendar spreads, diagonal spreads or are otherwise interested in fine-tuning the time component of their options expirations, the full suite of weeklys with daily expirations will create a great deal of flexibility in trade structuring, trade adjustment, pricing of positions, etc.  The bottom line:  SPX options expiring every day of the week will introduce a whole new set of opportunities.

What’s next?  Do I hear any votes for hourly options?


[source(s):  LiveVol Pro / CBOE]

Further Reading:
Weekly Options Coming on Strong
What a Difference a Weekly Makes
VIX Weekly Options Coming on September 28
Weekly Options Gain Momentum

For those who may be interested, you can always follow me on Twitter at @VIXandMore

Disclosure(s): net short VXX and VIX at time of writing; the CBOE is an advertiser on VIX and More

 [source(s):  LiveVol Pro / CBOE]

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