Time Buffers to Tame Volatility
Update: 2025-08-04
Description
In today's segment, Tom Sosnoff discusses the trade-offs between short-term and long-term options trading strategies, particularly focusing on duration risk. He emphasizes that longer-dated options tend to offer wider break-evens and lower daily risk compared to multiple short-term trades. The analysis details how shifting from short to long durations can significantly impact risk exposure, with a comparative study suggesting a reduction of approximately 2.3 times daily risk with longer expirations (i.e 10DTE to 60DTE). The segment concludes with insights on risk scaling over time in options trading.
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