I’m relatively new to options trading. Recently, I sold 5 covered call contracts about 2 weeks out, totaling $1,500. Today I realized that if I had done it weekly instead, I could have made roughly $1,200 the first week and another $1,200 the following week, so about $2,400 in total.
Do people usually sell covered calls weekly, or is biweekly more common?
It is better to do covered calls weekly than biweekly
byu/Fun-Try7241 inoptions
Posted by Fun-Try7241
8 Comments
The problem is that one week may not be enough time to recover if the trade goes against you. One week might be more profitable but it’s also more risky.
Anywhere from weekly to 60-90 days is pretty common from what I’ve seen
I like weeklies. It feels better to me than longer time frames. I want to get paid every week like a job.
First off, I think it really depends on how involved you are. If you prefer more passive investing, then just do monthlies. I’m more active and I do weeklies because I have a better feel for the price movement. It’s hard to predict where a stock is going to be 2 weeks from now vs 1 week. You have more events (numbers, fed, etc) that can really move the stock in a 2 week span.
Was there earning ? Any event that affects the volatility?
Do you want to lose the stock for minor up move and get paid minimum on it ?
Longer time gives you more premium and higher strike price.
In market there is no absolute better, there are info, R/R & tools to use as fit to your own needs, expectations & scenario
It depends on the stock, which one did u do this for?
It’s not always correct but yes, you generally make more on weeklies for same delta strikes – IF you are not assigned. Weeklies carry higher assignment risk and when you are assigned, you will definitely be better off with longer dated options at more favorable strikes.
That said, I am doing weeklies and I found it to be easier to manage and to mitigate assignment pains, I only do it on stocks I really want to hold and I try to (or at least trying to) be very careful with my position sizes.
I would recommend doing paper or small position trades for different expiration to see what tickles your fancy.
For covered calls i like bi weeklies strong premiums, enough time to react to sudden moves