With the price of many names getting so expensive lately, were beginning to see people look into day trading options rather than stock more so than ever before. The potential returns are much better due to the leverage and on the more popular names like Apple
First of all, those that day trade options are on the buy side. Buyers of puts and calls. The reason for this is that there is no real need to sell options if your intent is to exit within minutes. Sellers of options are looking to take advantage of the time decay and the increase in odds for that level of risk. With little time passing between entry and exit there is very little advantage.
As a buyer of puts and calls day traders focus on the current weeks expiration. This is advantageous to them as they are paying the least for the option while getting the most "stock-like" movement and that's one of the keys here: "Stock-like movement". Remember that each option in the chain behaves slightly different than the others and as a day trader you want to most active option given that you hope to profit on the move of the option price and nothing else. It is for this reason that day traders will choose the "At the money", current weeks expiration option to trade. This is the best they can do to get stock like movement.
NOw certainly this will not be for everyone and it is most definitely not for every stock. Truth be told there are maybe 8 stocks where you could use the long options instead of stock and expect it to be a worthwhile trade. Also, remember that risk doesn't change, just because you are day trading doesn't mean you will want to hold a losing position any longer than you would hold stock. As a buyer of at the money, front week expiration options you are really hoping the stock will move in your favor and quickly.
