InvestorQ : Can I also look to arbitrage with weekly options?
Tanu Shukla made post

Can I also look to arbitrage with weekly options?

Answer
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2 years ago


A very important role that weekly options will provide is arbitrage opportunities across time frames. For examples, when events are concentrated week, you can create long/short positions by buying options in one week and selling the same options in another creating a spread. Also when you find mispricing, it is possible for you to create an arbitrage opportunity between the monthly option and the aggregate value of put options. Weekly options offer you more trading cycles and thus give you an opportunity to diversify your risk. Any month, after all, is a series of discrete time intervals. Weekly options help you to capture each of these discrete time intervals and play them separately. This largely reduces your risk as a trader.