Weekly vs Monthly Options for Selling Premium: What 10 Years of Data Shows
Monthly options (30–45 DTE) produce better risk-adjusted returns for most premium sellers. Weekly options (7 DTE) generate higher absolute annualized returns but with significantly more risk, higher transaction costs, and more time commitment. Here's the full data.
This is one of the most debated topics in options selling: should you trade weeklies or monthlies? I've seen traders argue both sides passionately with nothing but anecdotes. So I ran the actual backtests — same strategy, same delta, same underlying, over 10 years. Let the numbers settle it.
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The Setup: Apples-to-Apples Comparison
To make this comparison fair, I held everything constant except the expiration cycle:
You can replicate these exact tests in OptionsPilot's backtester by adjusting the DTE parameter.
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Iron Condor Results: Weekly vs Monthly
The Numbers
| Metric | Weekly (7 DTE) | Monthly (30 DTE) | Monthly (45 DTE) |
What the Data Says
Weekly iron condors made more money (18.4% vs 13.2%) but with a worse Sharpe ratio (0.88 vs 1.14) and significantly deeper drawdowns (28.6% vs 18.4%). The weekly approach took 35% more risk for 39% more return — not an efficient tradeoff.
The profit factor tells an important story: monthly trades were more efficient. Every dollar lost in a monthly iron condor generated $1.91 in winnings, versus $1.72 for weekly. Monthly trades squeezed more profit per unit of risk.
Transaction costs are the hidden killer for weekly strategies. At $0.65 per contract and 4 legs per iron condor, each round trip costs $5.20 minimum. Over 52 weeks, that's $270 per single-lot — significant on a small account. Monthly trades cost $62 per year for the same single-lot position.
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Short Strangle Results: Weekly vs Monthly
The Numbers
The pattern is identical for strangles. Weekly produces higher raw returns but significantly worse risk metrics. A 36.2% max drawdown on a short strangle is rough — that's a strategy that can lose a third of your account before recovering.
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Why Weekly Options Are Riskier Than They Look
Gamma Risk: The Expiration Week Problem
This is the core issue. In the final days before expiration, gamma — the rate of change of delta — accelerates dramatically. A stock that moves 1% might cause your option's price to move 3–5x more than it would at 30 DTE.
Here's a simplified example of how gamma affects a short iron condor:
At 45 DTE, a 2% move is uncomfortable but manageable. At 3 DTE, the same 2% move is devastating. Weekly options live in this high-gamma zone for their entire lifespan.
The practical implication: a single bad day can wipe out weeks of premium collected. Monthly options give you a buffer — if SPY drops 2% on Monday, you still have 30+ days for it to recover before expiration.
The March 2020 Test
The COVID crash is the ultimate stress test for weekly vs monthly options. Here's what happened:
The weekly iron condor hit max loss 4 consecutive weeks. Each new position opened and immediately got crushed. The monthly iron condor, opened before the crash, lost money too — but only one position was at risk, not four separate ones.
Total damage in March 2020:
This is the difference between a bad month and a catastrophic month.
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Why Monthly Options Are More Forgiving
More Time to Be Right
A 45 DTE iron condor gives SPY 45 days to stay within your profit range. A 7 DTE iron condor gives it 7 days. If SPY gaps down 3% on Monday, the weekly position is in serious trouble with no time to recover. The monthly position still has 30+ days for the market to stabilize.
Theta Decay Is Front-Loaded
Yes, theta decay accelerates near expiration — that's the argument for weeklies. But the practical benefit is smaller than the theory suggests. Here's why:
At 45 DTE, the premium collected is roughly 3–4x what you'd collect at 7 DTE. So while daily theta is higher for weeklies on a per-day basis, the total premium per trade is much higher for monthlies. You make more per trade, trade less often, and pay fewer commissions.
| | Weekly | Monthly (45 DTE) |
Wait — weekly IS more premium per year, even after costs. So why are monthly options better?
Because the numbers above don't account for losses. Weeklies have more trades, which means more losing trades. When you factor in the higher frequency of max-loss events for weeklies, monthly strategies retain more of their gross premium as actual profit.
Less Time Commitment
This is the factor that most backtests don't capture: your time.
Weekly options need attention every single day. You're entering new trades every week, managing 52+ positions per year, and monitoring gamma risk constantly. A 2% pre-market gap on a Wednesday means you're scrambling to adjust or close before it gets worse.
Monthly options need attention a few times per month. You enter ~8 trades per year, manage far fewer positions, and have time to think before acting. For anyone with a job, family, or desire to not stare at screens all day, monthly is dramatically less stressful.
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When Weekly Options Actually Make Sense
I'm not saying weeklies are always wrong. They're better in specific situations:
1. You're a Full-Time Trader
If you can monitor positions all day, you can manage gamma risk in real-time. Close positions when SPY approaches your short strikes. Roll early. Take small losses before they become max losses. Weekly options reward active management.
2. You're Trading Very Small Size
With small positions where max loss is <1% of your account, the outsized risk of weeklies is manageable. A max loss of $200 on a $50K account is annoying, not devastating. You can afford to take more frequent small hits for higher overall returns.
3. You Want Higher Absolute Returns and Accept Higher Drawdowns
If your risk tolerance is genuinely higher — you can stomach a 30%+ drawdown without changing your strategy — weekly options deliver more raw return. The key word is genuinely. Most traders overestimate their risk tolerance until they experience the drawdown.
4. Low-Volatility Regimes
When VIX is below 15, weekly options benefit from the compressed premium environment. Monthly premium might be too thin to justify the trade, but weeklies can still generate a worthwhile credit because of accelerated theta decay near expiration.
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The Hybrid Approach: Why I Use Both
After running all these backtests, here's what I actually do:
Core position (70% of allocation): Monthly iron condors at 45 DTE. These are my bread and butter. Reliable, low-maintenance, good risk-adjusted returns. Enter on the third Friday of each month (monthly expiration), targeting the cycle 45 days out.
Opportunistic trades (30% of allocation): Weekly iron condors when VIX is elevated. When VIX spikes above 20–25, weekly premium gets juicy enough to justify the risk. I'll add 1–2 weekly positions alongside my monthlies, but only when volatility is elevated and I can collect a credit that compensates for the gamma risk.
This hybrid approach backtests to approximately:
Not as high-return as pure weeklies. Not as conservative as pure monthlies. But a practical balance that reflects how I actually want to trade.
Test the hybrid approach yourself — run a 45 DTE backtest and a 7 DTE backtest separately, then weight them 70/30 to see the blended result.
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Monthly P&L Comparison: What Your Account Looks Like
Here's what a $10,000 account looks like month-by-month for each approach (2024 as an example year):
| Month | SPY Move | Weekly IC P&L | Monthly IC (45 DTE) P&L |
The annual returns are nearly identical. But look at the worst month: the weekly approach lost $286 in April (when SPY dropped 4.2%), while the monthly approach lost only $64. And April 2024 wasn't even a crash — just a routine pullback. In a real crash month, the weekly drawdown would be multiples worse.
This table captures the core tradeoff: similar returns, dramatically different ride quality. Monthly options let you sleep at night.
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The Verdict: Monthly Wins for Most Traders
The data is clear on this one:
Monthly wins 6 out of 7 categories. Weekly only wins on raw return — which doesn't account for the higher risk and costs required to generate that return.
My recommendation: Start with monthly (45 DTE) options. Get comfortable with the strategy, build a track record, and grow your account. Once you're consistently profitable and have a larger account, consider adding weekly positions as a supplement — not a replacement.
Run the comparison yourself. Test a 7 DTE iron condor and a 45 DTE iron condor side by side. Look at the Sharpe ratios, the drawdowns, and the equity curves. The data will speak for itself.
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Frequently Asked Questions
Are weekly or monthly options better for selling premium?
Monthly options (30–45 DTE) are better for most premium sellers on a risk-adjusted basis. They produce Sharpe ratios of 1.0–1.2 versus 0.8–0.9 for weeklies, with 30–40% lower maximum drawdowns. Weekly options generate higher raw returns but at the cost of significantly more risk, higher transaction costs, and more time commitment.
Why do weekly options have more risk than monthly?
Gamma risk. Options near expiration have dramatically higher gamma, meaning small stock moves cause large changes in option value. A 2% SPY move at 3 DTE can cause 3–5x the P&L impact compared to the same move at 40 DTE. Weekly options live in this high-gamma zone for their entire duration, giving you less time to recover from adverse moves.
How much more do weekly options return than monthly?
In our 10-year backtest, weekly iron condors on SPY returned 18.4% annually versus 13.2% for monthly (45 DTE). That's 39% more return — but the weekly approach also had 55% more drawdown (28.6% vs 18.4%) and a 23% lower Sharpe ratio (0.88 vs 1.14). The extra return doesn't adequately compensate for the extra risk.
What DTE is best for selling iron condors?
45 DTE produces the best risk-adjusted returns for iron condors on SPY, with a Sharpe ratio of 1.14 in our 10-year backtest. 30 DTE is a close second (Sharpe 1.12) with slightly higher absolute returns. 7 DTE (weekly) has the highest raw return but the worst risk-adjusted performance.
Should beginners trade weekly or monthly options?
Beginners should trade monthly options exclusively. Monthly options are more forgiving of timing mistakes, require less active management, and provide more time to learn and adjust positions. Start with 45 DTE iron condors, get 6 months of experience, then consider adding weeklies if you want higher returns and can dedicate the time to active management.
How do transaction costs affect weekly vs monthly options?
Transaction costs are 5–7x higher for weekly strategies because you're executing 52 trades per year versus 8–12 for monthly strategies. For a single-lot iron condor at $0.65 per contract, weeklies cost approximately $680/year in commissions versus $104/year for monthlies. On a $10,000 account targeting 13–18% returns, that's a meaningful difference — transaction costs alone reduce weekly returns by 2–3% annually compared to monthly.