Options expiration date is something many day trader do not trade. This is to avoid volatility and unexpected trade turns. Since day traders are looking to make quit 1-5% gains depending on what their risk tolerance and target percentage profit is, they need quick action. Additionally, it needs to be a decisive trade.
On the other hand, for an options player, is the volatility a good things on expiration day. Obviously, you don’t really need to be buying something Friday morning that will be worthless, one way or another, by EOD. So what’s the plan in this type of market? It is good to clear your head and just take a break. It is also a good idea to still watch and learn the market, though. Yet, more options abound. Once can trade for scalps in the stocks, or switch to next month options. Example, the Nov 27 calls that I sold yesterday at .62 are worth 1.05 today. that means it would have been 100% profit if I had held. My profit was 13%. My understanding is that one should never consider profit worth any less than what it is – profit! A profit is better than an alternative whether that alternative is a loss or a breakeven.
MSFT is still underpriced and will be fun to buy. I just don’t want to buy today and see a bear Monday, because that will make me hold it longer. On the other hand, the same Nov 27 calls will be definitely worth more by Nov. since MSFT normally ranges 25-28 on a consistent basis. It’s always got it’s risks, but plays normally don’t offer such good rewards as when securities are undervalued and will shortly rebound.
