Weekly vs monthly options or…

Weekly vs monthly options or #pietrades vs #optionladder

Not trying to sound greedy but after I converted a lot of #pietrades to #fuzzies and #optionladder, the decay is A LOT slower. Like watching paint dry but there are some advantages and disadvantages. Had a lot of time to think about trading this weekend with tropical storm and hurricane on the way.

Advantages:
higher premiums up front
less frequent adjusting
lower gamma risk, it can move around more before it hurts the overall position.
less trading=less commissions and fewer trades to monitor
easier to adjust
less intensive trading

Disadvatages:
slower premium decay, much slower my theta is half of what it usually is
less overall premium, you get more up front but 4 weeks of ATM options is a lot more premium than 1 option sale
fewer positions
in the case of diagonals or multi strike calendars, harder to adjust with monthlies. Weeklies let you simply roll up/down/out
less compounding effect, my back of the note pad answer is about 15-20% less annualized returns compared to weeklies

So which one wins? Depends on your goals. Personally I am trying to grow accounts so I will be sticking with mostly weekly and #pietrades. The compounding effects more than offset the additional work.

If you already have everything you need, then #optionladder would probably make more sense.

Some days/months trading is easy, other not so much. These last 6 weeks have been hard for me after earnings went bad and not a lot of time to trade. If it was easy everyone would do it and be good at it.

Thanks again for the ideas. I finally close a lot of these trades in 11 days and can re-deploy capital.

#cat4, #optionladders