There’s a psychological trap traders fall into all the time — and it’s baked into your expiration date. If your trade plan is to hold for two weeks, but you buy an option with six weeks until expiration, guess what happens?
You start convincing yourself to hold longer. Maybe you didn’t hit your profit target yet. Maybe the chart still looks good. Whatever the reason, you start breaking your plan.
And that’s where things go wrong.
If you want to stay disciplined, match your expiration as closely as possible to your intended hold time. That way, your trade has a hard stop. The option expires — decision made. You’re not tempted to hang on hoping for more. You’re forced to act according to plan.
That’s not just psychological. It’s also practical. I broke down two trades — one short-dated in Meta (META) with a tight match between expiration and hold time, and one with extra time. The short-dated trade had better profit potential and was cheaper. The other gave more flexibility, but it opened the door to second-guessing. The lesson? If your plan is two weeks, buy two weeks. Don’t give yourself rope to hang your plan with.
Why Extrinsic Value Changes Everything
When you buy close to expiration, the percentage of your capital at risk due to time decay is much smaller — especially if you go in the money. That’s a huge advantage. In the Meta example, an in-the-money call expiring in two weeks had only about 20% of its cost tied to time decay. If the stock moved just 1% — a tiny move for Meta — you were already at break-even.
The more time you buy, the more extrinsic value you pay for. And if your option goes nowhere, you lose a lot more. With a longer-dated option in the same setup, even after Meta hit the target price, the return was lower — and the temptation to hold longer was stronger.
Discipline Is a Trade Tool
Buying more time sounds safer, but it’s not always smarter. The more time you have, the more chances you give yourself to deviate. When expiration matches your plan, your rules enforce themselves. You reduce second-guessing, minimize time decay, and stay in control.
So don’t just think about Delta, Theta or the Greeks. Think about discipline. Your expiration isn’t just a technical detail — it’s a built-in accountability system. Use it right, and you’ll not only make better trades, you’ll become a better trader.
Kane Shieh
Kane Shieh Trading
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*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
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