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Option Decay: ATM vs OTM

Option Decay: ATM vs OTM

Released Wednesday, 29th July 2020
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Option Decay: ATM vs OTM

Option Decay: ATM vs OTM

Option Decay: ATM vs OTM

Option Decay: ATM vs OTM

Wednesday, 29th July 2020
Good episode? Give it some love!
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Options decay differently depending on whether they are at-the-money or out-of-the-money. ATM options decay faster after the 21 DTE mark, but they have more gamma risk, which we prefer to avoid. OTM options actually decay much less after the 21 DTE mark, so we prefer to redeploy capital in a new trade for larger decay.

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