Loading ...And these two paragraphs were excerpted from Trader Vic’s post of 2006 Aug 22, 15:25 at this forum: —First off…
If you’re not out of the current month’s option by Wed of the previous expiration week, you will lose money, period… Secondly, you will have a chance to regain some of your loss during this period if you sell the option on the Wed, just before the option expiration…
And if you don’t, I guarantee you that the next two days (going into option expiration) will be down, big time, into the close… Now, you can back test this theory if you want, but I have already done it and almost every month has been the same…
So if you are in this situation, Sell the Wed, week before expiration and roll it forward or wait until 3pm on the Friday close and buy like crazy… So, you ask, how they are always able to do that… And I answer, easily…
They naked short sell into the two days prior to expiration and cover the last hour of expiration to make sure that they hit the round numbers… You can always tell where the round numbers are by looking at the open interest on the calls…
The one with the greatest open interest is where they will hit it right on the nose… So, unless you like giving your money away to the option thieves, heed my observations… Remember this is not trading advice, just my observations, do your own due diligence…—