Option Millionaires

[Imapuppy]

Well, let me first say that since the $SPY options are the most traded on the CBOE from a volume standpoint, it is going to be a more "efficient" market. That is, MMs pay the most attention to it and are able to price everything fairly. I don't find that anything rises or falls faster than I expect but then again I trade it a lot every week, 5 times or more.

One way to get ahead in options is to find inefficient markets, or in layman's terms, mispriced options. Usually this happens in securities that are traded more scarcely, and since they are traded more scarcely, they are able to be exploited if you know something others don't. With the $SPY you won't find that, simply because it is used by SO many professionals, it will always be priced efficiently, but fairly. You won't see the Imp. Vol drop or rise much in any given day (outside of a rare occurrence), and so your prices won't rise or fall as much without action in the underlying stock. For individual stocks (like $AAPL today) you will see that implied volatility can be adjusted all throughout the day, from 150 down to 20, back to 60, etc. This makes a big difference in the inflation of the premium.

Anyway hope this helps.