Market Measures

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Selling Weekly Puts

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.

What is the rationale behind trading 45 DTE options as opposed to 7 DTE options? Generally, there is more risk and less return for these trades, but let's see what the research shows...

Study
  • SPY, 2009 through 2018 (10 years)
  • Sold at-the-money puts
  • 45 DTE, 30 DTE, 7 DTE
  • Held to expiration for 7 DTE, managed at 21 days for 30 DTE and 45 DTE.
  • Recorded:
    • Daily P/L, Win Rate

We find that with proper management, the 45 DTE puts outperform and have less losers than the 7 DTE puts. By cherry picking the bull market from 2009 - 2018, we are able to see the best case scenario for short puts, and still prove that managing early can further improve results.

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