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Can weekly strategies be profitable?

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  • Can weekly strategies be profitable?

    I have read/heard multiple times that trading the weeklies may lead to short term profitability, but usually lead to long term failure. However, I imagine there are some exceptions. Those of you who've traded options for a long time, I'm curious what you think of these strategies.

    - day trading atm/otm naked calls and puts that expire the same week (or next week if it's Wed-Friday) for quick scalp or breakouts.

    - selling weekly otm credit spreads on stocks that are at or near supply/demand zones, and are likely to reverse. you're betting on where the stocks is unlikely to go, and because it's the final week for the contracts, theta is very high, so it's in your favor

    - selling 0dte spx credit spreads, and closing either in the first hour or 2 or before power hour.

  • #2
    • "Weekly(s) strategies" is not a defining term -- there would be an entire range of reasonably positive strategies, as well as rare/unlikely profitable strategies.
    • Further, the laying of high-gamma credit spreads demands careful monitoring -- putting short-DTE, OTM credit spreads on without such monitoring is like surfing blind-folded into a harbor. You WILL hit a hard and uncaring reality.
    • Use of the term "supply/demand zones" marks you as already having been duped by somebody. My advice is to sit on your money until you can unlearn that garbage.
    • For closing weeks' OTM options, theta decay is nearly linear, and even goes to zero in the closing periods. (Watch the IV↑.)
    • regarding the re-purchase of SPX credit spreads -- consider buying only the shorts -- it'll be a 50|50 shot as to whether the vig will bleed you as much as the entire spread. YMMV.