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The “Weekend Theta” Trade

Saturday, June 23rd, 2007 | Option Trading | Squid

Doesn’t work. Sorry.

In my last post, I mentioned picking up theta over the weekend. Just because it happens , do not think that you can come into the market on Friday morning, sell options , and then capture the weekend theta decline. The market makers already know this and start adjusting the IV down to account for the weekend on Friday morning.

Now, if you already have a position, you are good.

Have a great weekend !

1 Comment to 'The “Weekend Theta” Trade'

Squid Options » Blog Archive » Short Vega, Long Theta
February 18, 2008

[...] Using a option calculator, and advancing the date to Monday ( 2/18/08 ) , we have a price of $16.03. A loss of about $29 a day. Now, the is if implied volatility and price of the stock do not change. Both of these are unlikely, since the implied volatility on Fridays gets messed around. [...]