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Your Options are Dying Too Slowly
Weekly Edition: April 22nd, 2026
Market Movements
Current Level | Weekly Return | YTD | |
|---|---|---|---|
S&P 500 | 7,064.01 | 1.230% | 3.19% |
NASDAQ | 24,259.96 | 2.414% | 4.38% |
Dow Jones | 49,149.38 | 1.236% | 2.26% |
VIX | 19.50 | 7.261% | 30.43% |
Russell 2000 | 2,764.97 | 2.180% | 10.57% |
*Weekly Return is calculated as market open of the previous Wednesday, to market close this Tuesday (yesterday); Current Level is Tuesday’s (yesterday’s) close.
Weekly Rollout
The market is down for a second day on Tuesday
Futures like the extension to the ceasefire with Iran
FOMO is making call options the hot item right now
3-Year high retail sales in March: Brought to you by expensive gas
Who is Trump’s Fed nominee?
Trump will ‘remember’ the companies that don’t seek tariff refunds
Thought Throttle
What DTE should we use?
30 to 60 days is the most common answer. It gets repeated over and over.
But why?
Time decay is not steady. Early in an option’s life, theta is slow and barely noticeable. Most of the life of a long option is quiet.
As expiration approaches, decay accelerates fast. That’s where the real money is made.
Sell a one-year option and you collect more premium upfront. But most of that time is the slow part. Your capital sits there while theta barely works.
Sell a 30- to 60-day option and you step into the fast part of the curve right away. Less total premium upfront, but much faster decay and potentially more premium over the course of a year (more on this below).
A full year is a long time. Long-dated options lock you in. Shorter ones give you turnover. You can reset, adjust, or move on.
Now, shorter isn’t always better. More trades mean more work (yuck) and more opportunities for errors and mistakes.
The 30-60 day range is popular because it balances fast decay with manageable effort. There is nuance, but this is a good ‘jumping-off point.’
The math may shock you. You don’t want to miss the example below.
“Buying a stock without knowing when or why you should sell it is like buying a car with no brakes, or being in a boat with no life preservers, or taking flying lessons that teach you how to take off but not how to land.”
“No wise pilot, no matter how great his talent and experience, fails to use his checklist.”
Trade Mechanics
Shorter-dated options decay much faster. We can see this in comparing long and short-term cash-secured puts on both JP Morgan (JPM) and Google (GOOG). JPM currently sits at $313.00, and GOOG is at $330.47.
JPM Short-term | JPM Long-term | GOOG Short-term | GOOG Long-term | |
|---|---|---|---|---|
Options Contract | 18 Jun 2026 $295 Put | 19 Mar 2027 $270 Put | 18 Jun 2026 $305 Put | 19 Mar 2027 $285 Put |
Days until Expiration (DTE) | 58 | 332 | 58 | 332 |
Delta | ~25 | ~23 | ~24 | ~24 |
Mid Premium | $5.45 | $13.85 | $7.45 | $19.25 |
Capital At-Risk | $28,955 | $25,615 | $29,755 | $26,575 |
Cost Basis if Assigned | $289.55 | $256.15 | $297.55 | $265.75 |
Return if Not Assigned | 1.88% | 5.41% | 2.50% | 7.24% |
Annualized Return | ~12.45% | ~5.96% | ~16.84% | ~8.0% |
Theta (Daily) | -0.09 | -0.04 | -0.12 | -0.05 |
Est. Daily Theta Decay | -1.651% | -0.289% | -1.611% | -0.260% |
JPM is trading at $313.00. Both puts are roughly 25-delta and offer a solid entry if we’re comfortable owning the shares lower.
For the short-term $295 put (Jun 2026), we could sell for $5.45 mid, with a capital-at-risk of $28,955. If it expires worthless, we keep 1.88% in 58 days → 12.45% annualized. Theta is a healthy –0.09 (we collect $9/day). Cost basis if assigned is $289.55 (7.5% discount from current price).
For the Long-term $270 put (Mar 2027), we could sell for $13.85 mid, with a capital-at-risk of $25,615. If it expires worthless, we keep 5.41%… but over 332 days → only 5.96% annualized. Theta is just –0.04 (we collect $4/day). Cost basis if assigned is $256.15 (18.2% discount from current price).
Same story on GOOG, which is trading near $330.50.
For the short-term $305 put (Jun 2026), we could sell for $7.45 mid, with a capital-at-risk of $29,755. If it expires worthless, we keep 2.50% in 58 days → 16.84% annualized. Theta is a healthy –0.12 (we collect $12/day). Cost basis if assigned is $297.55 (~10.0% discount from current price).
For the long-term $285 put (Mar 2027), we could sell for $19.25 mid, with a capital-at-risk of $26,575. If it expires worthless, we keep 7.25%… but over 332 days → only 8.00% annualized. Theta is just –0.05 (we collect $5/day). Cost basis if assigned is $265.75 (~19.6% discount from current price).
Bottom line
Why ~45 DTE looks more attractive
Higher annualized return on capital: The short puts deliver 2× (JPM) to nearly 2× (GOOG) the annualized yield despite smaller raw premiums.
Faster theta decay: You collect $9–$12 per day on the short puts vs only $4–$5 on the long puts—roughly 2–3× more daily income per dollar of capital at risk.
Capital efficiency / roll potential: Short options free up your capital 5–6× per year so you can redeploy it repeatedly. The long-dated puts lock you in for almost a full year at half the annualized rate.
Risk/reward balance: Both short puts are still nicely OTM (~25 delta) with attractive discounts if assigned, but you’re not sacrificing nearly as much yield for that extra “safety” of a far-out expiration.
This is for educational purposes only—not a trade recommendation. Remember to always do your own due diligence and consult a financial advisor before making investment decisions.
Throttle Q&A
Is Theta the Only Thing that Matters When Choosing DTE?
No. Theta (time decay) is key, but volatility, liquidity, our trade management, etc. also obviously matter.
If you were planning a road trip, you wouldn’t only care about the car’s fuel efficiency. If Theta were your fuel efficiency, then volatility could be the weather, liquidity could be the road quality/usage, and your management skill could be how well you drive.
Great fuel mileage would not be the only thing that matters.
Does Shorter DTE Always Mean Better Trades?
No.
Shorter DTE has faster decay and higher annualized returns, but it also brings more decisions, higher gamma risk, quicker exposure to short-term moves, more management, etc.
Longer DTE is more forgiving with less noise, but you pay for it with slower decay and capital locked up longer.
Neither is always superior. The difference can be style dependent.
But if you go against the grain (30-60 DTE), have a good reason.
Got any questions or comments? Feel free to reply to this email—we’d love to hear from you!
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Disclaimer
The information provided in this newsletter is sourced from reliable channels; however, we cannot guarantee its accuracy. The opinions expressed in this newsletter are solely those of the editorial team, contributors, or third-party sources and may change without prior notice. These views do not necessarily reflect those of the firm as a whole. The content may become outdated, and there is no obligation to update it.
Options come with inherent risks. We strongly advise you to consult with a financial advisor before making any investment decisions, including determining whether any proposed investment aligns with your personal financial needs.
