Is all that uncertainty weighing on your mind at 3 a.m.? If so, it might be time to reassess your strategy. If you’re short, you’d like the market to stay still so you can get the most out of your theta. If you’re long options, you want the market to move (and in the right direction). That delta uncertainty-which intensifies the closer you get to expiration-is called gamma.įurthermore, although each option decays throughout its life (called theta), that decay becomes more pronounced the closer you get to expiration. At expiration, an option contract’s delta is either zero (out of the money and expires worthless) or 1.00 (in the money and exercised or assigned). Options Expiration: When the Cradle RocksĪs option traders know, the closer you get to expiration, the more uncertain the outcome of your positions-particularly those that are at the money.
Burning the candle at both ends isn’t likely to be sustainable in the long term. Remember, if you do end up spending time on the trading platform at night or engage in after-hours trading, you still need to get adequate rest. Want to experiment with something new? The off hours might be the time to log in to your paperMoney® account and place simulated trades for deeper analysis. Even if you’re not interested in premarket stock trading, after hours can still be the best time to prepare trading strategies. Many traders use this time to evaluate previous trades (the losers as well as the winners), check the charts, research the fundamentals, and develop their game plan. Check the complete list of 24/5 securities, or go to the Trade tab on thinkorswim and look for the purple EXTO Eligible sign, which stands for extended hours overnight (see figure 1). As of September 2021, the list of available securities included a broad selection of exchange-traded funds (ETFs) covering a wide range of sectors. retail broker to offer overnight trading in select securities, available 24/5 via the thinkorswim® platform and the thinkorswim mobile app. But be careful: Stocks are typically less liquid and more volatile in premarket and after-hours trading, especially right before or after a news release.Ģ4/5 trading. Companies typically report earnings either before the opening bell or right after the close, so these periods can help you navigate positions outside of normal hours. ET) and again in so-called after-hours trading (from 4:02–8:00 p.m. TD Ameritrade offers premarket trading (from 7–9:28 a.m. Many of your favorite markets are open and available in the overnight hours-and virtually around the clock. If you find yourself thinking about premarket stock trading or after-hours trading at night, think about trading at night. Premarket Trading: Log In, Monitor, Tap, or Clickįirst things first. So, grab that milk and plate of cookies and let’s look at some things that keep traders up at night-and what you can do about them. And if you have positions on-especially those that may have weighed on your mind during the trading day-it’s often during the overnight and premarket hours when those thoughts and feelings might be most acutely felt. Even in your hometown when it’s dark, some people are probably participating in after-hours or premarket trading. Somewhere in the world, data is being released, news is being made, and markets are responding. If you carry outstanding positions, do you tuck them in at night?Įven though you may be sleeping, the market isn’t.
If you’re like most people, you have a bedtime routine-lock the doors, brush your teeth, find your spiritual center, etc. Stubbornness and other mental mistakes can sometimes lead to stress during premarket trading Many markets are open for trading between the close and the next day’s opening bellĪt-the-money options reach their height of uncertainty just before expiration
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