Monthly vs Weekly Options
Monthly options are standardized contracts expiring on the third Friday of each calendar month, while weekly options (Weeklys) expire every Friday and were introduced by the CBOE in 2005 to give traders more precise control over short-term expirations.
The introduction of weekly options by the CBOE transformed how retail and institutional traders approach short-duration strategies. Before Weeklys existed, the shortest standard equity option had roughly three to four weeks until expiration when first opened. Weeklys added expirations every Friday, allowing traders to target specific earnings dates, Federal Reserve announcements, and other scheduled catalysts with pinpoint timing.
Monthly options remain the most liquid category for most underlying equities and ETFs. The concentration of open interest around standard monthly expirations — particularly in widely traded instruments like SPY, QQQ, and Apple (AAPL) — means that bid-ask spreads are tighter and market depth is greater than in weekly contracts. For large institutional block trades or complex multi-leg strategies, monthly expirations are usually preferred.
Weekly options carry dramatically higher theta decay per day. An at-the-money option with five days remaining loses a much higher percentage of its value each day than a comparable option with 30 days remaining. This makes Weeklys attractive to premium sellers who want rapid theta collection and to buyers who want cheap, high-gamma exposure around an imminent event. However, the same rapid decay that benefits sellers punishes buyers if the expected move fails to materialize.
The CBOE currently lists Weeklys on hundreds of equity and ETF underlyings, as well as index products including SPX, NDX, and RUT. The most actively traded Weeklys are 0DTE (zero days to expiration) contracts on SPX, which expire at the close each trading day and have attracted significant volume from both retail traders and institutional desks managing intraday exposure.
For beginners, monthly options are generally preferable for learning because they provide more time to be right on the directional view and are less susceptible to the violent theta decay that can destroy weekly positions over a single bad session.