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.

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

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