tastytraders like to sell straddles with 45 days to expiration and manage the trade at 25% of the credit we receive. In an attempt to optimize the straddle, we tested performance with longer trade duration.
We tested Straddles with:
- 45, 60, 90, 120, and 150 DTE
- Holding to expiration
- Managing at 25% Max Profit
In both cases, holding to expiration and managing the trade at 25% of the max profit, the 45 day to expiration Straddle outperformed longer duration trades.