Catch the Draft From Expiring Options

Have you ever heard of "expiration plays?" These are short-term plays made during the last week before expiration. Very close-to-the-money options traded during this week can make dramatic moves in value very quickly.

The best "expiration plays" are index options, such as options on the S&P 100 Index (OEX). The key to success in this strategy is to buy on weakness in the option price.

In expiration plays, you are betting on surprise volatility swinging the price of a stock or index -- and, thus, the option -- in your favor. Given the current level of volatility, you certainly have the advantage now.

This trade has one caveat: You can incur a fair number of losses with this strategy. However, just one big move in the index price can give you the jackpot of a lifetime. (Try paper trading this idea to get a feel for the results of this type of play.)

Read more: The Thrill of Expiring Options

However, if a quick trade is not your style, don't be afraid to take your time with an options trade…