Weekly options have revolutionized the way traders approach the options market. With their short time frames and accelerated time decay, weekly options require precise timing to be profitable. This guide will show you exactly when to enter and exit weekly options trades for optimal results.
Understanding Weekly Options
Weekly options expire every Friday and are listed each Thursday for the following week's expiration. They offer unique advantages and challenges compared to monthly options.
Key characteristics: Weekly options have higher theta decay, higher gamma, lower premiums, and require more precise timing than monthly options. They are tools for precision, not long-term bets.
The Weekly Options Calendar
Thursday (New Weeklies Listed)
New weekly options are listed each Thursday for the following Friday's expiration. This gives traders 8 trading days of life for the new series. Thursday afternoon is when many traders begin analyzing next week's opportunities.
Monday (Position Entry Day)
Monday is often the best day to open new weekly options positions. You have five days until expiration, giving adequate time for your thesis to play out while still benefiting from accelerated time decay as a seller.
- Best time for selling weekly options
- Weekend news creates opportunities
- Five full days of time decay remain
Tuesday and Wednesday (Management Days)
Mid-week is optimal for managing existing positions. If trades are profitable, consider taking profits. If trades are moving against you, these days provide enough time to adjust without the pressure of expiration.
Thursday (Decision Day)
Thursday is the critical decision point for weekly options. With only one day remaining, you must decide whether to hold into expiration or close positions. Most professional traders close winning positions on Thursday to avoid expiration day risks.
Friday (Expiration Day)
Expiration Friday is the most volatile day for weekly options. Gamma is at its peak, meaning small moves in the stock can cause large changes in option value. This day is generally not recommended for opening new positions.
Weekly Options Timeline
A typical weekly options trade might look like this:
- Monday 10:30 AM: Sell a put credit spread on SPY
- Wednesday: Position is 50% profitable, continue holding
- Thursday 2:00 PM: Position is 75% profitable, close for profit
- Friday: No position risk, capital freed for next week
Best Time of Day for Weekly Options
Selling Weekly Options
For options sellers, the optimal window is typically 10:00 AM to 11:00 AM ET on Monday or Tuesday. By this time, morning volatility has settled, and you can assess the week's likely range. Avoid selling at the open when spreads are wide.
Buying Weekly Options
Buying weekly options is a high-risk, high-reward strategy. The best times are typically around known catalysts or technical breakout points. If buying, do so early in the week to minimize time decay damage.
0DTE Options (Same-Day Expiration)
Zero days to expiration options have exploded in popularity, particularly on SPY and other major indices. These require specialized timing strategies.
Morning Session (9:30 AM - 11:00 AM)
The morning session often sees the largest moves and highest premiums. 0DTE sellers can collect significant premium but must manage positions actively. Buyers can capitalize on morning momentum plays.
Midday Lull (11:00 AM - 2:00 PM)
Premium erodes rapidly during the midday lull. This is typically the worst time to buy 0DTE options. Sellers can benefit from the accelerated decay but must be prepared for afternoon reversals.
Power Hour (3:00 PM - 4:00 PM)
The final hour can produce significant moves. By this point, most premium has evaporated. This hour is generally better for directional speculation than premium selling.
0DTE Warning: Zero days to expiration options are extremely risky. Small moves can result in 100% losses. These instruments should only be used by experienced traders with strict risk management rules.
Gamma Risk in Weekly Options
Gamma measures how quickly delta changes as the stock price moves. In weekly options, especially near expiration, gamma is significantly higher than in monthly options.
What This Means for Traders
- Options near the money can go from worthless to in-the-money quickly
- Sellers face significant risk of assignment
- Buyers can see explosive gains (or losses) on small moves
- Position sizing must be smaller than with monthly options
Managing Gamma Risk
Close positions before the final two days of expiration week when gamma peaks. If holding into expiration, ensure you are comfortable with the potential outcomes and have capital to handle assignment if necessary.
Strategies for Each Day of the Week
Monday Strategy: Open New Positions
Use Monday to establish your weekly positions. Whether selling credit spreads or buying directional options, Monday entry gives you maximum time for theta decay (sellers) or thesis development (buyers).
Monday Selling Strategy
SPY is trading at $500. You believe it will stay above $495 this week.
- Sell the $495/$490 put spread for $1.00 credit
- Maximum profit: $100 per contract
- Maximum risk: $400 per contract
- Target: Close at 50% profit ($50) by Thursday
Tuesday/Wednesday Strategy: Monitor and Adjust
Use these days to monitor positions and take action if needed. Set price alerts at your adjustment points. If a position hits 50% profit, consider closing. If it moves against you by more than the credit received, evaluate closing or adjusting.
Thursday Strategy: Take Profits or Close Losers
Thursday is profit-taking day. If your weekly positions are profitable, close them. The additional premium you might collect by holding into Friday is not worth the gamma risk. Close losing positions to preserve capital.
Friday Strategy: Stay Flat or Trade Small
Most conservative traders avoid trading weekly options on expiration Friday. If you do trade, use smaller position sizes and have clear exit rules. Never hold through the close without understanding assignment risk.
Weekly Options for Different Strategies
Credit Spreads
Weekly credit spreads are popular because of rapid time decay. Sell on Monday, target 50% profit by Thursday. Use strikes 1-2 standard deviations out of the money for higher probability.
Iron Condors
Weekly iron condors collect premium from both sides. Best opened on Monday when premium is highest. Manage aggressively as the position can move quickly in the final days.
Directional Plays
Buying weekly calls or puts requires precise timing. Use these only when you have strong conviction about near-term direction. Set stop losses and take profits quickly.
Risk Management for Weekly Options
- Position size: Never risk more than 1-2% of capital on any weekly options trade
- Stop losses: Use time-based stops (close by Thursday) or price-based stops (close at 2x credit received)
- Profit targets: Take profits at 50% of maximum profit on selling strategies
- Avoid earnings: Do not hold weekly options through earnings unless specifically playing the event
- Watch assignment: Be aware of early assignment risk on in-the-money short options
Track Your Weekly Options Performance
Pro Trader Dashboard automatically categorizes your trades by expiration timeframe, helping you see how your weekly options trades compare to monthly trades.
Summary
Weekly options timing is crucial for success. The optimal approach for most traders is to open positions on Monday, manage mid-week, and close by Thursday. Avoid holding into expiration Friday unless you are an experienced trader comfortable with gamma risk. Remember that weekly options amplify both gains and losses - trade smaller and manage more actively than you would with monthly options.
Learn more about options timing with our guides on monthly options timing and expiration week strategies.