In this Market Measures, we continue our search in tradeoffs between our standard mechanics and some alternative ones. This time we look at extending our DTE for our short premium and see how that compares to our standard 45 DTE cycles. The key tradeoff between selling a strangle at 45 DTE compared to a longer dated strangle is the daily P/L that you see over time. Longer trades had slightly higher P/L's per trade, but when normalizing by day, it was a much slower trade. It would be reasonable to expect less overall risk on a daily basis for the longer DTE trades because you consistently made less money per day (taking average P/L divided by DTE).
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