Expiry strategy concepts (educational)
These pages explain the concepts traders reason about near expiry — how time decay, volatility crush and gamma shape defined-risk and neutral approaches, and how positions are adjusted, rolled or managed for assignment risk. They teach ideas and trade-offs, never specific trades.
Expiry Strategy Concepts: Expiry strategy concepts describe how traders think about the final days of a contract: harvesting theta while managing gamma risk, staying delta-neutral, using defined-risk structures, anticipating volatility crush, adjusting or rolling positions, and controlling assignment risk. These are educational frameworks, not recommendations.
Theta Harvesting Concepts
Time decayTheta harvesting is the concept of structuring a position — typically by selling options — so that it profits from the steady erosion of an option's …
Neutral Expiry Concepts
Market viewNeutral expiry concepts describe structuring a position so its outcome depends on the underlying staying within a range by expiry, rather than on it …
Volatility Crush Concepts
VolatilityA volatility crush is the sharp, often sudden fall in an option's implied volatility that occurs once a known, anticipated event (like results, an RB…
Defined-Risk Approaches
Risk structureA defined-risk approach is any option structure — typically combining a sold option with a bought option further from the money — where the maximum p…
Risk Management During Expiry
Risk structureRisk management during expiry is the discipline of adjusting position sizing, monitoring and exit rules to account for the sharply rising gamma and s…
Position Adjustment Concepts
Risk structurePosition adjustment is the concept of modifying an existing options position — by adding, removing, or changing strikes of legs — in response to how …
Rolling Positions
Risk structureRolling a position means closing an option (or futures contract) that is nearing or at expiry and simultaneously opening a similar contract in a late…
Assignment Risk
Settlement riskAssignment risk is the possibility that an option seller's short position finishes in-the-money at expiry, triggering an automatic obligation to sett…