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Which expiry should you pick for a covered call?

Most covered-call sellers pick an expiry about 30 to 45 days out. It's close enough for time decay to work for you, and far enough to leave room to adjust if the stock moves. Here's the reasoning in plain words.

Options guide · 7-minute read · Updated 2026-10-26

The short answer: 30 to 45 days

Pick a Call option that expires in about 30 to 45 days. That's the window most sellers in the wheel strategy use, and for a plain reason: it balances premium, time decay and room to be wrong.

It's a habit, not a law. Some people sell weeklies. Some sell two or three months out. Each choice trades one thing for another, and the rest of this page shows what.

Why time decay favours this window

An option's price has two parts. One part is real value (how far the strike is inside the money). The other is Time value: the price of the chance the stock moves before expiry.

Time value melts every day. That melt is Theta. It doesn't melt evenly. Far from expiry, it drips. In the last few weeks, it pours. Our theta decay guide draws the curve.

Selling at 30 to 45 days means you sell before the fast part of the melt and hold through it. You collect a decent premium, and most of it melts while you own the call. That's the whole idea.

What a shorter expiry changes

A 7-day call melts fastest of all. But three things come with it:

• Less premium per contract. A week of time value is worth less than five weeks of it.
• More decisions. You're back at the Options chain every Friday. That's 52 choices a year instead of about 10.
• Less room for error. If the stock jumps on Tuesday, there's no time left for it to settle back. Sellers call this Gamma risk: near expiry, the call's price swings hard with each dollar the stock moves.

Our page on weekly covered calls weighs this honestly.

What a longer expiry changes

A 90-day call pays more up front. But:

• The melt is slow for the first two months. You hold the risk the whole time and collect the decay only at the end.
• More can happen. An earnings report, a dividend date, a market scare. Three months holds more surprises than one.
• You're locked in longer. If the stock runs past the strike in week two, you wait ten more weeks capped, or pay up to close.

A worked example across three expiries (an illustration, not a trade idea)

You own 100 shares of a made-up stock, XYZ, at $50. You look at the $55 strike on three dates. Hypothetical premiums, round numbers:

Now the stock does one of four things by each expiry:

In the $62 row, every version gives up the $700 above the $55 strike; only the premium differs.

Read the first row twice. When XYZ falls to $42, every version loses. The longer call softens the fall the most, but it's still a loss of hundreds of dollars on $5,000 of shares. No expiry turns a falling stock into a win.

The 90-day call looks best in this table. But the table hides the cost: 90 days of risk, and 90 days you can't sell a fresh call. The 35-day seller could have sold a second and a third call in that time, if the stock behaved.

How to pick, step by step

1. Open the chain and find the monthly expiry closest to 35 days. Our chain guide shows where to look.
2. Check that no earnings date sits inside that window. If one does, skip to the expiry after, or wait. See covered calls before earnings.
3. Check the Ex-dividend date too. A dividend inside the window raises the chance of early assignment.
4. Compare the bid at 30 days and 45 days. If the extra two weeks pay very little, take the shorter one.
5. Write down the date you'll review the trade, before you place it. Our exit rules page has a simple set.

Questions