What are weekly options?
In one line: Weekly options are option contracts that expire every Friday, giving sellers short expiries with fast time decay but little time for a stock to recover from a move against them.
How it works
Standard stock options expire once a month, on the third Friday. Weekly options add an expiry on every other Friday too. On busy stocks and big ETFs, the Options chain shows an expiry for each of the next several weeks, then the monthlies further out.
They work exactly like monthlies. Same Contract multiplier, same strikes, same Assignment rules. The only difference is time. A weekly sold on Monday has four or five days to live.
For sellers that changes two things:
- Decay is fast. The whole life of the option sits in the steep part of the Time decay curve.
- Swings are sharp. With days left, a small move in the stock swings the option's value hard. That's Gamma risk, and weeklies live inside it.
In the wheel strategy, some people sell weeklies to stay flexible, re-pricing the trade every Friday. Others avoid them for the reason the next example shows.
An example (hypothetical)
An illustration, not a trade idea. Made-up stock XYZ trades at $50. Compare two puts at the $47 strike.
| Option | Days to expiry | Premium | Collected |
|---|---|---|---|
| Weekly | 5 | $0.30 | $30 |
| Monthly | 30 | $0.90 | $90 |
On Wednesday, XYZ drops to $44 on bad news.
| Position | What you can do | Likely result |
|---|---|---|
| Weekly $47 put, 2 days left | Almost no time value left to sell; roll costs money | Assigned Friday at $47, worth $44: +$30 − $300 = −$270 |
| Monthly $47 put, 27 days left | Hold; the stock has four weeks to recover, or roll for a small credit | Unknown; the put is underwater now, but the trade isn't over |
Same stock, same drop. The weekly turned a $30 premium into a $270 loss with no room to manage it. The monthly might end the same way, but it had time, and time is the seller's main tool.
Why it matters for sellers
Weeklies look attractive because the premium per day is higher and the result arrives fast. The cost is that every trade is a bet on this week's news, and there's no slack.
Reasons sellers use them:
- Collecting premium on a stock you're fine being assigned on, with a fresh decision each week.
- Selling a covered call right after a jump, for a few days, to avoid a long cap.
- Avoiding a known event by expiring before it.
Reasons sellers avoid them:
- A gap through the strike leaves no time to roll.
- More expiries means more orders, more commissions and more chances to make a tired decision.
- The bid-ask spread is a bigger share of a small premium.
A fair rule: if you wouldn't be fine owning the shares by Friday, don't sell the weekly.
Questions
Are weekly options good for selling covered calls?
They can be, on a stock you'd be happy to sell any week. The premium is small each time and the cap resets every Friday. A fast rally above the strike still means your shares are called away.
What day do weekly options expire?
Friday, at the close of trading. If a Friday is a market holiday, that week's options expire on Thursday.
Do weekly options decay faster than monthly ones?
Per day, yes. A weekly spends its whole life in the fast part of the decay curve. That same fast part is where a stock move changes the option's value the most.
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