Weekly Options for the Wheel Strategy: Why Weeklies Can Be Your Best Choice (2025)

Q: Are weekly options more profitable than monthly options?

Weekly options offer higher annualized return potential (25-40%+) compared to monthly options (15-24%) because you can collect premium 52 times per year instead of 12. However, they come with trade-offs: less downside protection, higher gamma risk, and more time commitment. For active traders willing to manage these risks, weeklies can be significantly more profitable.

What Are Weekly Options (Weeklies)?

Weekly options, commonly called "weeklies," are options contracts with a lifespan of approximately one week. Unlike traditional monthly options that expire on the third Friday of each month, weeklies are listed every Thursday and expire the following Friday.

Key Characteristics

Expiration: Every Friday (52 opportunities per year vs 12 for monthlies)
Time Decay: Accelerated theta decay, especially in final 3 days
Liquidity: Best on major indices (SPY, QQQ) and blue-chip stocks
Premium: Lower per contract, but compounds when traded weekly

First introduced by the Chicago Board Options Exchange (CBOE) in 2005, weeklies have exploded in popularity among active traders who want more control, faster adjustments, and the ability to generate income every single week.

Why Active Traders Choose Weeklies

While monthly options have their place, weekly options offer distinct advantages that make them the preferred choice for active, engaged traders. Here's why:

1 Higher Annualized Return Potential

The math is compelling: selling weekly options allows you to collect premium 52 times per year instead of 12. Even if each weekly premium is smaller, the compound effect creates significantly higher annualized returns.

Example Comparison:

Weekly Strategy:

0.5% premium × 52 weeks = 26% annualized

Monthly Strategy:

2% premium × 12 months = 24% annualized

*Simplified example. Actual returns vary based on strike selection, market conditions, and adjustments.

2 More Frequent Adjustments & Flexibility

Markets change fast. With weeklies, you're never locked into a position for 30+ days. Every Friday, you get a chance to reassess market conditions, adjust strike prices, or change your strategy entirely.

React to earnings announcements without waiting weeks
Adjust for Fed meetings, economic data, or geopolitical events
Change tickers weekly based on what's working
Roll positions more precisely with less transaction cost

3 Faster Capital Recycling

When you sell a cash-secured put, your capital is tied up as collateral. With weeklies, you free up that capital every Friday—giving you the flexibility to deploy it elsewhere or roll into a different ticker with better premium opportunities.

This is especially powerful for traders with smaller accounts who want to maximize capital efficiency without being locked into long-duration trades.

4 Better for Volatile Markets

High implied volatility (IV) means higher premiums. With weeklies, you can capitalize on short-term volatility spikes without committing to a full month of exposure. When VIX is elevated or a stock is making news, weekly premiums can be exceptionally attractive.

Pro Tip: Sell weeklies during earnings season volatility, then switch back to monthlies when IV settles. Track both strategies in Njord Options to see which performs better for your portfolio.

5 Enhanced Risk Management (Shorter Exposure Windows)

Less time until expiration means less time for the unexpected to happen. With weeklies, you're exposed to market risk for 7 days instead of 30-45. If you're selling puts and the market takes a downturn, you're back to cash (or shares) within a week rather than being stuck in a month-long position.

This shorter duration also means you can more precisely time your entries around known events (like Fed announcements or CPI data).

The Trade-Offs You Need to Know

Weekly options aren't perfect for everyone. Here are the honest trade-offs you need to understand before diving in:

⚠️ Faster Gamma Risk

With weeklies, you're trading gamma more than theta. Gamma measures how fast delta changes—and with only days until expiration, gamma explodes. This means small price moves can cause big swings in your option value. Monthly options are more forgiving.

⚠️ Less Downside Protection

Selling a monthly put at 30 DTE might give you $300 in premium (3% cushion). Selling a weekly put might give you $80 (0.8% cushion). If the stock drops, you have far less premium buffer before assignment. Weeklies require tighter strike selection and more active monitoring.

⚠️ Higher Time Commitment

Trading every week means you need to be present, engaged, and making decisions 52 times a year instead of 12. If you're traveling, busy, or prefer a set-it-and-forget-it approach, monthlies are better.

⚠️ Higher Commission Costs

52 trades per year instead of 12 means more commissions. At $0.65 per contract, that adds up. Make sure your broker offers competitive options pricing, or the extra commission drag will eat into your higher annualized returns.

The Bottom Line:

Weeklies are powerful, but they're not autopilot. They reward active, engaged traders who can monitor positions and make quick decisions. If that's you, the trade-offs are worth it for the higher returns and flexibility.

Weeklies in the Wheel Strategy: Real Examples

Let's see how weekly options work in practice with the wheel strategy. We'll walk through real examples of selling weekly puts, getting assigned, and selling weekly covered calls.

Example 1: Weekly Cash-Secured Put

Stock: Apple (AAPL) trading at $180

Strategy: Sell 1 weekly put contract at $175 strike, 7 DTE (Days To Expiration)

Premium Collected: $80 ($0.80 per share × 100)

Collateral Required: $17,500 (strike × 100)

Return if Expires Worthless: 0.46% in 7 days

Annualized Return: ~24% (if repeated 52 weeks)

Possible Outcomes:

✅ AAPL stays above $175: Keep $80 premium, sell another weekly put next Friday
📦 AAPL drops below $175: Get assigned 100 shares at $175, start selling weekly covered calls

Example 2: Weekly Covered Call (After Assignment)

Shares Owned: 100 shares of AAPL at $175 cost basis (from assignment)

Current Price: $178

Strategy: Sell 1 weekly covered call at $180 strike, 7 DTE

Premium Collected: $90 ($0.90 per share × 100)

Return on Premium: 0.51% in 7 days

Annualized Return: ~26.5% (if repeated 52 weeks)

Possible Outcomes:

✅ AAPL stays below $180: Keep $90 premium + shares, sell another weekly call next Friday
💰 AAPL rises above $180: Shares called away at $180. Total profit: $500 capital gain + $170 total premium ($80 put + $90 call) = $670 profit on $17,500 capital = 3.8% in 2 weeks

Full Weekly Wheel Cycle Summary

1

Week 1:

Sell weekly put, collect $80 premium

2

Week 2:

Assigned 100 shares, immediately sell weekly covered call, collect $90 premium

3

Week 3:

Shares called away at $180. Profit realized, back to cash. Start over with new weekly put.

Total Cycle Performance:

Time: 3 weeks

Premium Collected: $170 ($80 + $90)

Capital Gains: $500 (shares sold at $180, cost basis $175)

Total Profit: $670

Return: 3.8% in 3 weeks (~66% annualized)

*This is a best-case scenario. Real results vary based on price movement, adjustments, and market conditions.

When Weeklies Are Your Best Choice

Not everyone should trade weekly options. Here's the honest assessment of when weeklies are the right fit for you:

You're an Active Trader

You check your positions daily, enjoy the process, and can commit to making decisions every Friday. You don't want to wait 30 days to adjust.

You Want Higher Returns

You're willing to accept more gamma risk and less downside protection in exchange for significantly higher annualized income potential (25-40%+ vs 15-24% for monthlies).

You Have a Smaller Account

Selling puts on blue chips requires significant capital. With weeklies, you can recycle that capital 52 times a year, maximizing efficiency. Perfect for accounts under $50k.

You Trade Liquid Tickers

Weeklies work best on SPY, QQQ, AAPL, MSFT, TSLA, and other highly liquid stocks with tight bid-ask spreads. Illiquid tickers have poor weekly option pricing.

Markets Are Volatile

High IV = high premiums. When VIX is above 20 or earnings season is hot, weekly premiums can be exceptional. You can capitalize without long-term commitment.

You Want Weekly Cash Flow

Collecting premium every Friday feels like a weekly paycheck. If you prefer frequent, predictable income over larger but infrequent monthly deposits, weeklies deliver.

Perfect For:

Active traders with $10k-$100k accounts who trade liquid blue chips, check positions daily, and want to maximize annualized returns through frequent premium collection and capital recycling.

When to Use Monthly Options Instead

To be fair, here's when monthly options are the better choice:

You're busy or prefer passive income

Monthlies require decisions 12 times a year instead of 52. If you don't want to babysit trades, use monthlies.

You want more downside protection

Monthly options collect 2-3x more premium per trade, giving you a bigger cushion before assignment.

You're new to options

Monthlies are more forgiving. Theta decay is predictable, gamma is manageable. Learn the wheel strategy with monthlies first.

Markets are calm (low IV)

When VIX is below 15, weekly premiums are tiny. Monthly options make more sense in low-volatility environments.

You pay high commissions

At $1+ per contract, trading 52 times a year gets expensive. Monthlies reduce commission drag significantly.

💡 Pro Tip: Hybrid Approach

Many successful traders use both. Sell weeklies during high-IV periods (earnings season, market volatility) and switch to monthlies when IV is low or during vacation. Track both in Njord Options to see what works best for your style.

Common Mistakes to Avoid with Weekly Options

❌ Selling Too Close to the Money

The temptation: Sell the $179 put when stock is at $180 to get a juicy $150 premium. The problem: You'll get assigned almost every time. Stick to 1-2% out of the money for weeklies to maintain reasonable win rates.

Better: Sell the $175 put for $80 and keep your 80%+ success rate.

❌ Ignoring Earnings & Events

Always check the earnings calendar before selling weeklies. A company reporting earnings mid-week can cause massive volatility. Either avoid earnings weeks entirely or sell further OTM to protect yourself.

Pro move: Use tools like Njord Options to track upcoming earnings for your tickers.

❌ Trading Illiquid Weeklies

Wide bid-ask spreads will destroy your returns. Stick to SPY, QQQ, AAPL, MSFT, NVDA, TSLA, and other mega-cap stocks with tight spreads. Avoid small-cap stocks with 10-cent bid-ask spreads on weeklies.

Rule of thumb: If the bid-ask spread is wider than 5% of the mid-price, skip it.

❌ Not Tracking Your Performance

With 52 trades a year, it's easy to lose track of what's working. Are you actually making 25% annualized, or is it closer to 15% after assignments and adjustments? You need data to know.

Solution: Use Njord Options to track every weekly trade, calculate true returns, and see which tickers perform best.

❌ Over-Trading (Chasing Premium)

Just because you can trade every week doesn't mean you should. If IV is low or market conditions are unfavorable, it's okay to skip a week or switch to monthlies. Don't sell weeklies just for the sake of it.

Quality > Quantity. Wait for good setups.

❌ Letting Emotions Drive Decisions

Weekly options move fast. You might see your put go from $0.80 to $3.50 in two days if the stock drops. Don't panic. Stick to your plan: either take assignment and start selling calls, or roll out to the next week. Emotional decisions = losses.

Frequently Asked Questions

Are weekly options more profitable than monthly options?

Weekly options offer higher annualized return potential (25-40%+) compared to monthly options (15-24%) because you can collect premium 52 times per year instead of 12. However, they come with trade-offs: less downside protection, higher gamma risk, and more time commitment. For active traders willing to manage these risks, weeklies can be significantly more profitable.

What's the best strike price for weekly cash-secured puts?

Aim for strikes that are 1-2% out of the money (OTM). This balances premium income with a reasonable probability of expiring worthless (typically 70-85%). Selling at-the-money (ATM) gives more premium but has a high probability of assignment. Selling far OTM (5%+) is safer but premium is often too small to be worth it for weeklies.

How much capital do I need to start trading weekly options?

For cash-secured puts, you need enough capital to buy 100 shares at the strike price. Example: Selling a $175 put requires $17,500 in cash. Cheaper stocks like Ford (~$12) require only $1,200. Most traders start with $10k-$25k and trade 1-3 contracts on mid-cap stocks. You can also trade weekly spreads (bull put spreads) which require far less capital ($500-$2,000 per trade).

Which stocks are best for weekly options?

Stick to highly liquid, large-cap stocks and ETFs with tight bid-ask spreads: SPY, QQQ, AAPL, MSFT, NVDA, TSLA, AMZN, GOOGL, META. These have weekly options with strong volume and minimal slippage. Avoid small-cap or low-volume stocks—the spreads will eat your profits.

Should I trade weeklies during earnings season?

It depends on your risk tolerance. Earnings weeks offer higher IV and bigger premiums, but also much higher risk of big price swings. Conservative approach: avoid earnings weeks entirely. Aggressive approach: sell further OTM (3-5% instead of 1-2%) to capture elevated premium while maintaining some protection. Always check the earnings calendar before opening weekly positions.

How do I track my weekly options performance?

With 52 trades per year, manual tracking in spreadsheets becomes overwhelming. Use Njord Options (free) to automatically track every weekly put, assignment, covered call, and roll. See your true annualized returns, premium collected, win rate, and which tickers perform best for your strategy. Import trades from Robinhood or enter manually.

Can I combine weekly and monthly options?

Absolutely! Many successful traders use a hybrid approach: sell weeklies when IV is high (VIX > 20, earnings season, market volatility) to capitalize on elevated premiums, then switch to monthlies during calm markets or when taking a break. Track both strategies in Njord Options to measure which performs better for different market conditions.