The expiration date is the final day on which an option can be exercised. After this date, the contract no longer exists. For US equity options, standard monthly expirations fall on the third Friday of each month. Weekly expirations (Weeklys) expire every Friday.
DTE (Days to Expiration) is the shorthand metric traders use. An option expiring in 30 days has "30 DTE."
For the Wheel Strategy: Most experienced wheel traders sell options in the 21-45 DTE range. This range captures the steepest portion of the Theta decay curve while avoiding the extreme Gamma risk of options with fewer than 7 DTE.
Weekly vs. Monthly: Weekly options generate income faster but require more active management and higher transaction costs. Monthly options are lower maintenance and allow more time for the stock to recover from a dip before expiration.
Examples of Expiration Date (DTE) in Action
- 1Selling a put with 30 DTE on a Monday gives you approximately 4 weeks for the trade to work in your favor.
- 2An option expiring on the third Friday of the month is a "standard monthly" expiration with the highest open interest and tightest spreads.
- 3With 2 DTE and a stock near your strike, Gamma risk is extreme — small price moves cause massive option value changes.