The Option Alpha Podcast cover image

The Option Alpha Podcast

232: Tips and Tricks for Navigating Options Expiration

Aug 7, 2023
Navigating options expiration is essential for traders today. Discover the top automated tips for managing your portfolio effectively. Key strategies include adjusting exit options as expiration approaches and monitoring extrinsic value. Learn about the importance of using defined limit orders rather than market orders. Additionally, setting alerts for low liquidity conditions and critical levels between strike prices can optimize your trading performance. Enhance your skills with these practical insights!
38:30

Podcast summary created with Snipd AI

Quick takeaways

  • Proactively adjusting exit strategies as expiration approaches allows traders to manage risk and liquidate positions effectively.
  • Monitoring extrinsic value and setting critical alerts are essential for minimizing assignment risk during options expiration.

Deep dives

The Evolution of Options Expiration

Options expiration has evolved significantly, moving from a monthly schedule to weekly expirations in 2005, and daily expirations introduced in 2022. This trend of increasing frequency represents a crucial change for traders, as it necessitates more strategic management of expiration risk. The capability to navigate these expirations is now critical for anyone involved in options trading, especially as daily expirations might become more common in the future. With this shift, traders should not merely endure expirations, but rather embrace proactive strategies that engage with this risk head-on.

Get the Snipd
podcast app

Unlock the knowledge in podcasts with the podcast player of the future.
App store bannerPlay store banner

AI-powered
podcast player

Listen to all your favourite podcasts with AI-powered features

Discover
highlights

Listen to the best highlights from the podcasts you love and dive into the full episode

Save any
moment

Hear something you like? Tap your headphones to save it with AI-generated key takeaways

Share
& Export

Send highlights to Twitter, WhatsApp or export them to Notion, Readwise & more

AI-powered
podcast player

Listen to all your favourite podcasts with AI-powered features

Discover
highlights

Listen to the best highlights from the podcasts you love and dive into the full episode