Best option trades for monday
And when options are out of the money and are trading cheaply, there is even more leverage. Remember, if options were to expire out of the money, they would be worthless, so this was an inherently risky trade. Originally, market participants thought the Altera options trade occurred moments after this tweet. Intel is in talks to buy Altera. Deal would be largest in Intel's history. A well-perfected algorithm could easily make this trade in milliseconds, and this is a far more plausible explanation.
Selecting a strike price and deciding to buying the calls at the mid-price or hitting the ask would likely take longer than 1 second. Regardless, whoever or whatever placed this trade, unequivocally maximized the power of options. Is this one of the greatest options trades in history? Amidst the chaos, there was an enormous amount of opportunity. Although most of the millions he made that day came from shorting Nikkei index futures, he made a quarter of a million dollars by selling overpriced put options to investors that panicked.
After closing out his short position in the Nikkei index futures, he noticed far out of the money puts were trading for a heavy premium. Shortly after he placed this trade, the Nikkei started to rebound and volatility collapsed. Trading works best when the market is bubbling with activity from traders all over the world. When there is good trader activity in the market, it generates the liquidity and volatility needed for the underlying asset to get to its target before the option expires.
Even though assets like currencies and commodities are supposed to be hour markets, there are only certain times of the day when the market activity is at its maximum. This is usually when we have an overlap of the trading zones of the world. Because not all assets have the same trading hours, we will discuss the various classes of assets as separate entities, taking into account their own peculiar trading hours. As we mentioned earlier, stocks are usually traded for a maximum of 6 to 8 hours a day.
As such, the US markets are used as the benchmark of checking the trading hours for stocks. US stock markets usually trade from 9. If you are trading stocks in the binary options market, pay attention to the times at which the stock markets in which they are listed are in operation. The diagram below gives a perfect illustration of this. You also need to know that the local currencies of the active time zones will have increased volatility over others.
Another way of studying the trading times would be to group the commodities under the exchanges where they are traded. As such, the agricultural commodities, which are traded in the Chicago Mercantile Exchange, are more actively traded from 9.