So I do credit spreads, mainly bull put spreads. I've had a lot of juicy gains doing weeklys on big tech stocks compares to different strategies like 45 DTE , then closing at 21 DTE etc etc, or taking gains after 50% profit. Besides not benefiting from theta decay, or not having time to adjust the trade, what other pros and cons are there of doing weeklys?
Weekly Credit Spreads- Pros and Cons
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Posted by REI_N_Options
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Theta decay accelerates toward expiration, so you’re benefitting from even MORE theta decay with weeklies. 40-60 days out is when the curve noticeably steepens, so “not benefitting” usually means selling farther out in expiration, not closer.
Not having time to adjust would be the big problem IMO. I like to close with about equal parts “days since open” and “days to expiration” which is sort of a broader version of opening around 45 and closing around 21 that you mentioned. Gamma also becomes a bigger concern the closer you get to 0DTE so if I opened with 5-10 days I would personally still try to closer at 3-5 DTE. Otherwise you’re not so much “replacing monthlies with weeklies” as “playing 0-1DTEs” which is a different game.