Market Measures

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Trade Short Duration Options

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.

If we like to manage winners or close early, why don’t we just trade 21 DTE options? This segment of Market Measures takes a closer look at why we manage those longer duration options opposed to just trading shorter duration options.

The study compares managing winners at 45 DTE and managing early at 45 DTE with 21 DTE options. Based on the results, management in the 45 DTE options outperforms the 21 DTE options since the longer duration options have lower volatility.

Therefore, we like to use managing strategies with longer duration options instead of just trading shorter duration options.

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