Trading Rules of Thumb

Trade Duration | Trading Rules of Thumb

Trading Rules of Thumb

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

Options expire. If ITM they will expire to the intrinsic value. If OTM they will expire worthless. We call this time frame until they expire the trade duration.

Studies have demonstrated that short premium trades entered at 45 days and exited at 21 days maximizes decay while minimizing the Gamma or exposure risk.

We have many rules of thumbs for all areas of options trading, join Tom and Tony today as they discuss the rules around trade duration full detail!

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