Should I Sell Weekly or Monthly Covered Calls?

Both work. Here's how to decide:

Weekly Covered Calls

Pros:

  • More flexibility to adjust
  • Faster theta decay (% per day)
  • Can react to news/events
  • Higher annualized premium potential

    • Cons:

  • More work (4-5 trades/month)
  • Higher commissions add up
  • More gamma risk near expiration
  • Requires active monitoring

    • Monthly Covered Calls

    Pros:

  • Less work (1 trade/month)
  • More time premium upfront
  • More forgiving if stock moves
  • Easier for beginners

    • Cons:

  • Less flexibility
  • Capital tied up longer
  • Harder to react to changes
  • Slightly lower annualized return

    • Premium Comparison

    For a $100 stock:

    | Timeframe | Premium | Annual (if repeated) | Weekly$1.00$52 (52%) Monthly$3.50$42 (42%)

    Weeklies CAN generate more, but you're trading 4x as often.

    My Recommendation

    Trader TypeBest Choice BeginnerMonthly (30-45 DTE) Part-timeMonthly Active traderWeekly or 2-week | Passive income | Monthly |

    Sweet Spot: 30-45 Days

    Many traders use 30-45 DTE (days to expiration) as a balance between premium and management effort.