“Weekly” Investments Are Popular With Big Traders But Come With Drawbacks

With the trading volume for weekly short-term options having grown, our securities fraud law firm wanted to remind investors that there are risks involved in these investments. Weeklys are listed on a Thursday and expire the next Friday. Their popularity is due in part to their lower cost compared to options that expire after a longer period of time. Aggressive traders, such as hedge funds, are among the weeklys’ primary investors.

Weeklys are popular on NASDAQ, CBOE Holdings, OMX, and Intercontinental Exchange. They were introduced in 2005. Weeklys are available on the majority of liquid stocks and a number of individual equities and exchange-traded funds.

Barron’s reported last year that there were over 400 weekly options listed on exchanges. Many of them involve the most popular indexes and stocks. That said, there are negatives to investing in weeklys, including:

· A smaller stock pool

· Higher commissions

· Price executions that are not that favorable

· Lower liquidity options

Weeklys are not for all investors. While they are designed for making a fast profit, not everyone can handle the risks.

At The SSEK Partners Group, our securities law firm represents hedge funds, pension funds, and other institutional investors that have sustained losses due to financial fraud or negligence involving weeklys and other short-term trading options. Contact us today.

Big Traders Love Short-Term Options, Barrons, April 25, 2015

Your initial case consultation is free. We have helped thousands of investors to recoup their losses. Your best chance of financial recovery is to have an experienced short-term options fraud attorney representing you.

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