timwest

SPY options expiration chart - updated

BATS:SPY   SPDR S&P 500 ETF
1089 8 2
SPY             options expiration is highlighted by red circles around the closing prices each 3rd Friday of the month. These levels end up being support and resistance and I look for the market to respond at these levels. You can see that the last sell-off fell back to the two old expiration levels from last year. Granted, that is a long time ago but at least it looks good on a chart. In the past, I would give odds that the market would fall after an options expiration, then put open interest would expand and indicate a floor of support would build, then it would time for a rally. When VIX             is low it indicates a level of comfort and complacency that is unnerving me, but what is supporting equity prices is the drop in the bond market is telling me that people are finally making the proper asset allocation decisions to exit their over-bloated bond positions and move funds over to their underweighted equity holdings.
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SubZero
4 years ago
good work Timwest
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timwest PRO SubZero
4 years ago
Thanks szabolcsfeczak
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timwest PRO
4 years ago
It's nice to see that the market found support at the last expiration level.
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3Sold
4 years ago
Awesome!
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SubZero
4 years ago
This is witchcraft :) Awesome levels, they work. Big thanks
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timwest PRO SubZero
4 years ago
You are most welcome! I'm glad I can offer some insights that can help you and anyone who wants to learn more about how the market works and then figure out how to trade best to fit your personality and needs. Options are an excellent choice for many reasons, but they can also be a disaster if they are used improperly. (Think about gasoline - it is wonderful when you put it in your engine and for cleaning up tar and other messes, but there are a lot of places you don't want to put it.) Good fortune to you on your quest for trading riches. I'm glad to help. Cheers. Tim
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SubZero
4 years ago
Tim, I looked into options and found it complex because of the role of volatility in the price not to mention time decay and strike price picking which can render the whole option worthless and very risky. Maybe for intraday leverage the weekly options are okay, but I think for an average speculator they do not give better opportunities than any other possibilities. FX market gives significant leverage if I want that and does not have the complexity.

Anyhow I try not trade but to understand options for conventional trading. I try to understand the impact of option expiry a bit more. Also there is valuable information can be extracted from options such as expected (implied) volatility and the expected high and low (using the "pain" levels) Can you suggest some online resource which explains these factors and mechanics in a bit more detail. Cheers
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