Some traders prefer to capitalise on market fluctuations weekly as it allows them to earn more profits. Instead of having 12 expirations, they have 52 expirations in a year. No doubt, it’s a great thing for traders as they don’t need to wait for a month to see the outcome.
This type of trading is called weekly options trading and it has been around for several years. However, it has become more popular in recent times because of the benefits involved.
To earn greater returns, it is essential to have a solid weekly options strategy . By implanting the right strategy, you can go a long way in this field. But before you venture into weekly options, it is important to learn about the different types available. You will find those details and more in the post below.
Characteristics of Weekly Options
Before delving into the types of weekly options, let’s give you an overview of the characteristics.
- Since weekly options are European styled, they can be exercised only when they expire.
- All positions in the weekly options can be settled on the expiry day.
- Traders are required to pay a premium to buy weekly options from a seller.
- Settlements in weekly options trading takes place a day after the expiry date.
Types of Weekly Options
Weekly options can be of different types and understanding these can help you profit more. Here’s a brief overview of the different types of weekly options:
Bank Nifty Options
This type of options is linked to the Bank Nifty Index, which represents 12 of the most important liquid capitalised stocks in the banking sector. Traded on National Stock Exchange (NSE), Bank Nifty Options expire on the last Thursday of the month. In case, the last Thursday is a trading off, the contract gets expired a day before.
Nifty 50 Options
As the name suggests, Nifty 50 Options are associated with the Nifty 50 Index, which happens to be one of the largest Indian companies listed on the NSE. Like Bank Nifty Options, Nifty 50 Options also gets expire on the last Thursday of the month. If the last Thursday is a trading holiday, you can expect the contract to expire on the previous day.
FIN Nifty Options
Based on the FIN Nifty Index, FIN Nifty Options tracks various financial services like NBFCs, banks, insurance, housing finance, etc. Unlike the other two options in the list, FIN Nifty Options expires on the last Tuesday of the month. By chance the expiry day turns out to be a holiday, the contract will get expired a day earlier.
MIDCPNIFTY Options
Associated to Nifty Midcap Select Index, MIDCPNIFTY Options is meant to monitor the how stocks are performing in the Nifty Midcap 150 index. The contract stays valid till the last Tuesday of the month. In case, the last Tuesday is an off day, it will get expired the previous day.
Weekly options trading is an exciting investment options for traders who are not satisfied with 12 expirations. With the help of the right strategy, you can benefit yourself a great deal in this field.
