Stock Market Options Trading cover image

Stock Market Options Trading

111: To Hold or Not to Hold to Expiration

Mar 5, 2024
Exploring the benefits of holding options to expiration vs. taking profits early, comparing strategies from 2021-2023, analyzing passive index options trading, factors influencing trade decisions, and profitable expiration and trading strategies.
13:31

Podcast summary created with Snipd AI

Quick takeaways

  • Holding to expiration offers hands-off approach, while taking profits early improves win rate of options trades.
  • Put credit spread strategy proves effective with favorable risk-reward ratio despite varying profit expectancy per trade.

Deep dives

Comparison of Holding to Expiration and Taking Profit Early

The podcast explores the dilemma of holding options trades to expiration versus taking profits early. By comparing the results of a put credit spread strategy over a period of three years, the speaker delves into the trade-offs involved. Holding to expiration allows for a hands-off approach once the trade is entered, requiring no further management. Conversely, taking profits at 50% of the credit improves the win rate but reduces the overall profitability of the strategy.

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