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Averaging 45 DTE?

Market Measures

Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.

Oftentimes when trading, we might not have the option to place a trade with 45 DTE, but could we use a combination of positions to have an average of 45 DTE?

Most of us here at tastytrade intuitively do average our positions to around 45DTE, today we wanted to put some numbers and context around this idea.

To do this we looked at selling ATM Naked Puts (managed at 50%) and Straddles (managed at 25%), we looked at durations of 15DTE, 30DTE, 45DTE, 60DTE, and 75DTE. From those returns we looked at combinations of 30 and 60DTE, 15 and 75DTE, and all 5 durations averaged. The study was done from 2005 to present. Be sure to tune in to hear Tom and Tony breakdown the results!

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