Choosing Strikes and Expirations for Income Trades
You know every income trade in the book. The last skill is choosing exactly which strike and which date to sell, and that comes down to two dials: delta and days to expiration.
- How delta works as your odds dial when selling premium
- Why 30 to 45 days to expiration is the seller's sweet spot
- How to turn those two dials into an actual trade
- How to adjust both dials depending on which income trade you are running
You now know every income trade this course has to offer: covered calls, cash-secured puts, the wheel, credit spreads, iron condors, strangles. Each one answers "what do I sell?" What none of them answered yet is the question you face every single time you open your broker: which strike, and which date?
That question has an actual framework behind it, not a guess. It comes down to two dials you turn together: delta, which sets your odds, and days to expiration, which sets your clock.
Delta: Your Odds Dial
Every option carries a number called delta, and for a premium seller it doubles as a rough read on your chances. A 0.30 delta option has roughly a 30% chance of finishing in the money, which means roughly a 70% chance you keep your credit clean if you sold it.
This is the same delta you met over in the Intermediate Course's strike-picking lesson, just read from the seller's side of the table. A buyer pays for odds. A seller gets paid for taking on the other side of them.
Many premium sellers settle around 0.30 delta as a default starting point: a roughly 70% chance of keeping the full credit, with a premium that is still worth collecting. It is a balance, not a rule carved in stone, and the rest of this lesson is about when to turn that dial in either direction.
Days to Expiration: Your Clock
The second dial is time. Options do not lose value at a steady pace, they decay slowly at first and then faster and faster as expiration closes in, dropping most steeply in the final few weeks.
Sell too far out, at 90 or 120 days, and you tie up capital for a long time waiting on decay that has not picked up speed yet. Sell too close, in the final days, and a single sharp move can test or breach your strike with no time left to react. The 30 to 45 day window is the seller's sweet spot: decay has already started accelerating, and there is still enough runway to close early or roll if the trade needs managing, the way you learned in the last lesson.
Putting the Two Dials Together
Here is what it looks like as one decision instead of two. You want to sell a cash-secured put on Apple, currently at $200, and you are looking to collect income without taking on much risk of assignment.
That is the whole framework. Every income trade in this course reduces to those same two questions: how close do I sell, and how far out in time?
Dialing It Up or Down by Trade
The 0.30 delta, 30-to-45-day default is a fine starting point, but it is not one-size-fits-all. Each trade shape asks for a slightly different setting.
- Sell more conservatively, around 0.20 to 0.30 delta
- You are on the hook alone; no wing softens a bad move
- You are often fine with assignment, so this is about pace, not fear
- Can sell a little closer, since the wing caps the max loss
- Two-sided trades (strangles, condors) usually stay conservative on both strikes
- The cap lets you trade a bit more delta for a bit more credit
A single naked strangle, remember, has undefined risk, so it deserves the most conservative strikes of anything in this course, further out than you would sell on a capped spread. The wing on an iron condor is what buys you the room to sell a little closer to the price.
- Delta is your odds dial: a 0.30 delta short strike is roughly a 70% chance of keeping the credit.
- 30 to 45 days to expiration is the seller's sweet spot, fast decay with room to manage.
- Combine both dials into one decision: pick the strike for your odds, then the date for your clock.
- Sell single short options more conservatively; a defined-risk wing buys room to sell a little closer.
- The richest premium sits closest to the price. Chasing it without weighing the odds is how income trading goes wrong.
Pop Quiz
Three quick questions to lock it in. Pick an answer and the explanation shows up right away.
You sell a put at 0.30 delta. Roughly what is your chance of keeping the full credit?
A 0.30 delta is roughly a 30% chance the option finishes in the money, which flips around to roughly a 70% chance the seller keeps the credit clean.
Why do most premium sellers favor the 30 to 45 day window?
Decay has already started accelerating by then, but there is still enough runway left to close early or roll if the trade needs it.
Why can an iron condor be sold a little closer to the price than a naked strangle?
A capped max loss is what lets an iron condor sell a little closer than a strangle would responsibly sell, since the wing limits how bad a breach can get.
Bottom Line
Every income trade comes down to two dials: delta, which sets your odds, and days to expiration, which sets your clock. Start around 0.30 delta and 30 to 45 days, then turn each dial based on the trade in front of you, more conservative when you are alone on a single short option, a little closer when a wing is capping your risk. Master those two dials and you are no longer picking numbers off a chain at random, you are running a real system.
Next up: Common Income Trading Mistakes, the last stop in this course. You know how to build the trade and manage it. The final lesson covers the handful of mistakes that still catch premium sellers of every level, and the fix for each.