When entering short premium trades, we look to put them on with 45 DTE. Today, we take a deeper look into why we do this.
The two main reasons that we look to put trades on with 45 DTE is that past studies have shown it is a nice trade-off between risk (as measured by the number of days) and reward. It also gives us enough time so that if the position moves against us, we still have time for it to come back. Alternatively, if it is a winner from the beginning, we can manage early.
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