Casual Articles
#1 in Business Subscribe Email Print

You are here: Home > Finance > Stocks Mutual Funds > Market Timing Strategy - The Day-After Options Expiration (With a Twist)

Tags

  • about
  • cboes
  • cboes website
  • while looking
  • these options

  • Links

  • Using a Correspondent Lender for Your Mortgage
  • A Solid Foundation to Creating a Profitable Ezine!
  • Guide to a Great Weight Workout
  • Casual Articles - Market Timing Strategy - The Day-After Options Expiration (With a Twist)

    Affiliate Marketing Can Lead to Residual Income
    If you are thinking about becoming an affiliate marketer, it may be in your best interest to think about promoting programs that will offer you the ability to earn residual income. There are a lot of affiliate programs out there offering the possibilities to earn residual income. down day.

    The Twist

    But while looking at this issue, we also found this little nugget - there was a strong correlation between the return on the day of expiration (Friday) and the return on the day after (Monday). When Friday was down, Monday tend

    Say It Again Sam, Don't Pay it Again: The Case For Usably Stated Usability
    User-centered Design is not brain surgery. Noted usability specialist Steve Krug summed it up best in his well-regarded usability bible "Don’t Make Me Think!," the very title of which says it all as elegantly and eloquently as this website producer has ever heard it put. It’s
    Savvy investors know that the stock market has historically been weak on the Monday following options expiration and may choose to go short (or at least not go long) on that day. In this article, we double the predictive power of that rule with our own little twist.

    What is the day-after options expiration? Equity and index options all expire after the close of trading on the third Friday of each month. The “day-after options expiration” then is usually the following Monday. Note: traders can find a calendar of options expiration dates on the CBOE’s website at www.cboe.com.

    Between 1970 and 2006, there have been 444 of these options expiration days. We're going to ignore the one in October of 1987 because as we all know on that Monday the market fell a whopping -20.47% and we don't want that to skew our results.

    Of the 443 remaining days, 58.47% were followed by a down Monday with an average return of -0.15%. That's a pretty consistent observation in an otherwise bullish period - the day-after options expiration tends to be a down day.

    The Twist

    But while looking at this issue, we also found this little nugget - there was a strong correlation between the return on the day of expiration (Friday) and the return on the day after (Monday). When Friday was down, Monday tende

    Affiliate Marketing Versus Network Marketing (MLM): Income formula Revealed!
    Both affiliate marketing and network marketing pay people for referring a product or service. What then is the difference between affiliate marketing and network marketing?The difference is best explained in terms of the way compensation is structured to pay for performance.

    What is the day-after options expiration? Equity and index options all expire after the close of trading on the third Friday of each month. The “day-after options expiration” then is usually the following Monday. Note: traders can find a calendar of options expiration dates on the CBOE’s website at www.cboe.com.

    Between 1970 and 2006, there have been 444 of these options expiration days. We're going to ignore the one in October of 1987 because as we all know on that Monday the market fell a whopping -20.47% and we don't want that to skew our results.

    Of the 443 remaining days, 58.47% were followed by a down Monday with an average return of -0.15%. That's a pretty consistent observation in an otherwise bullish period - the day-after options expiration tends to be a down day.

    The Twist

    But while looking at this issue, we also found this little nugget - there was a strong correlation between the return on the day of expiration (Friday) and the return on the day after (Monday). When Friday was down, Monday tend

    No Frills Web Design Company
    There are a very large amount of people and companies offering web design services and therefore it should not be difficult to bag yourself a bargain. There is a market for no frills web design where you should be able to obtain a website for under a ?100.Web design companies
    ptions expiration dates on the CBOE’s website at www.cboe.com.

    Between 1970 and 2006, there have been 444 of these options expiration days. We're going to ignore the one in October of 1987 because as we all know on that Monday the market fell a whopping -20.47% and we don't want that to skew our results.

    Of the 443 remaining days, 58.47% were followed by a down Monday with an average return of -0.15%. That's a pretty consistent observation in an otherwise bullish period - the day-after options expiration tends to be a down day.

    The Twist

    But while looking at this issue, we also found this little nugget - there was a strong correlation between the return on the day of expiration (Friday) and the return on the day after (Monday). When Friday was down, Monday tend

    Got Debt?
    Then read on...The pressure you feel because of your personal debt might be causing you to struggle where you should succeed.It creates a psychological and spiritual block that prevents you from blasting forward to success. That kind of block is like living in a
    and we don't want that to skew our results.

    Of the 443 remaining days, 58.47% were followed by a down Monday with an average return of -0.15%. That's a pretty consistent observation in an otherwise bullish period - the day-after options expiration tends to be a down day.

    The Twist

    But while looking at this issue, we also found this little nugget - there was a strong correlation between the return on the day of expiration (Friday) and the return on the day after (Monday). When Friday was down, Monday tend

    Direct Mail Marketing for Chiropractors
    Direct mail marketing can be a great way for a chiropractic office to develop new customers. The chiropractors can advertise an introductory special and in this way people who have back problems or aches and pains can come in and find out what is going on. It makes sense for new pa
    down day.

    The Twist

    But while looking at this issue, we also found this little nugget - there was a strong correlation between the return on the day of expiration (Friday) and the return on the day after (Monday). When Friday was down, Monday tended to also be down, and vice-versa.

    Showing this without the benefit of a table is a bit difficult, but let’s give it a shot. When the expiration day (Friday) was up, the day-after (Monday) was also up 46.98% of the time with an average return of +0.04%. However, when the expiration day was down, the day-after was up only 35.55% of the time with an abysmal average return of -0.36%.

    The point of all those numbers is that we can double the predictive power of the day-after rule by considering the returns on the day of expiration. If expiration Friday is down, smart investors might choose to avoid being in the market on Monday or even going short.

    This isn’t an entire trading strategy in and of itself, but it's so rare that we find an idea that has been able to successfully short the market over an extended period of time that we think it’s a worthy addition to the trader's toolbox.

    Happy Trading!

    HTTP = HTML link (for blogs, profiles,phorums):
    <a href="http://www.casualarticles.com/article/116439/casualarticles-Market-Timing-Strategy--The-DayAfter-Options-Expiration-With-a-Twist.html">Market Timing Strategy - The Day-After Options Expiration (With a Twist)</a>

    BB link (for phorums):
    [url=http://www.casualarticles.com/article/116439/casualarticles-Market-Timing-Strategy--The-DayAfter-Options-Expiration-With-a-Twist.html]Market Timing Strategy - The Day-After Options Expiration (With a Twist)[/url]

    Related Articles:

    Selecting Payroll Software

    Do You Really Want to Work There?

    Choosing The Right Credit Counseling Service

    Bookmark it: del.icio.us digg.com reddit.com netvouz.com google.com yahoo.com technorati.com furl.net bloglines.com socialdust.com ma.gnolia.com newsvine.com slashdot.org simpy.com shadows.com blinklist.com