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\u2019 primary investors.<\/p>\n
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.<\/p>\n
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: <\/p>\n
\n\u00b7 A smaller stock pool<\/p>\n
\u00b7 Higher commissions<\/p>\n
\u00b7 Price executions that are not that favorable<\/p>\n
\u00b7 Lower liquidity options<\/p>\n<\/p>\n