For most traders, the goal is to make money in the market.
A few days ago, I watched Ryan Jones's Video on Weekly Options, which explained how to reach that specific goal.
Ryan is the creator of PayDay Stocks and has been an active trader since 1987.
In Ryan’s video, he shows you the most important attribute behind creating simple, unprecedented trading opportunities.
Although, when Ryan says unprecedented opportunities, it doesn’t mean that there are no risks with Weekly Option strategies.
If you decide to take advantage of Weekly Options, Ryan warns traders to start SMALL and make sure you fully understand the strategy you’re trading and the risks specifically related.
Ryan goes on to explain the concept of PPD (Price Per Day) and how it affects Weekly Options.
If you want to understand Weekly Options, this is where you should begin.
You can calculate the PPD by dividing the time value of the option by the number of days left until option expiration.
The KEY to understanding the unprecedented opportunities in Weekly Options is to understand the Warped PPD values between various options.
When trading Weekly Options, the overriding principle you need to follow no matter what options strategy you want to trade is to buy cheap PPD options and sell expensive PPD options.
This principle alone is worth more than what you have paid for all options related books or educational courses combined and is the backbone behind every option strategy Ryan trades.
Ryan doesn’t look at the price of the option first to determine which is the best option to buy or sell.
Instead, he looks at the PPD value.
Let’s say that it’s Jan 6th and Weekly Options are available concurrently for the next 6 Fridays (in a market where Weekly Options are available).
Ryan’s Weekly Options approach allows us to look at an “at the money” option for each one of the follow expirations and determine not only the average overall PPD, but also the PPD for the next 7 days.
However, don’t think that you can just buy cheap options and sell expensive ones based on PPD and consider nothing else.
Another major contributing factor is price movement.
With this strategy, you have to realize that market movement can and does enhance, diminish, and nullify probabilities gained from Warped PPD vales.
Certain strategies work better in stagnant markets, while others work better in bullish or bearish markets.
Properly trading in any type of market requires you to ALWAYS structure the trade to take advantage of the Warped Time Value as the foundation of the strategy.