Today I want to dig into some of the questions people often ask me: How far out should I sell my covered calls? What Delta should I choose? Should I avoid earnings reports?

But first, let me vent a little. My third post in this series just got flagged again, and I’m not even going to bother reposting it. Not sure if you guys can still see it. After reading through the rules carefully, it seems that Xiaohongshu thinks sharing stock trading strategies counts as “financial education,” which apparently requires some kind of license or credential. What do they expect me to do—go take the CFA exam just so I can share my experiences? Ridiculous. Meanwhile, the platform pushes endless shallow, clickbaity content, but when someone tries to share something thoughtful and genuinely helpful, they make it unnecessarily difficult. Anyway, let’s get back to the topic.

How Far Out Should You Sell Covered Calls?

My personal preference is to sell options that expire about two weeks out. Why? Because theta decay accelerates the most during the final two weeks before expiration (see Figure 2-3). Yes, the last month in general has fairly fast decay, but I don’t like going further than two weeks because too much can happen in a month.

The other advantage of selling shorter-term CCs is flexibility. If the stock rallies toward your strike price, you can roll to a later expiration with a higher strike. Over time, that can leave you with a much better final strike than if you had just sold a one-month CC from the beginning. In other words, two-week cycles help you capture more upside and reduce the chance of missing out on a big stock rally.

Delta Selection: More of an Art Than a Rule

Delta choice is a little more nuanced. When I sell my first CC after buying shares, I usually start around Delta 0.2.

But rolling is where judgment comes in. If the stock has dropped, I still want to collect some premium but also don’t want to miss a rebound, so I’ll lower Delta to around 0.1–0.15.

On the flip side, if the stock rallies and I’d be happy selling at around this level anyway, I’ll keep rolling every two weeks but increase the Delta a bit. That way, I’m still harvesting higher premiums, and if the stock dips back down, at least I’ve pocketed more income.

And if my CC goes in-the-money? Honestly, that’s not the end of the world. Because I tend to sell shorter expirations, by the time it’s ITM there are usually only a few days left. That gives me room to roll into a longer-dated CC — say one month or more — with a good chance of pushing it back out-of-the-money.

When I decide I actually want to take profits, that’s when I’ll shift to selling ATM CCs. Sometimes I’ll even sell ITM calls one week out to squeeze that last 1% return. My simple benchmark: if I can pull ~1% per week, that’s solid.

Should You Avoid Earnings Reports?

A lot of people ask me if I dodge earnings when selling CCs. Personally, I don’t. Earnings season is actually great for covered calls because implied volatility spikes, which means juicier premiums.

If I’m sitting on a paper loss, I’ll happily sell CCs into earnings — sometimes I’m even counting on a post-ER rally to help me out. But if I’m already sitting on a big gain, I’ll often take profits before the report. The way I see it, the market always offers new opportunities, so there’s no need to get greedy and try to squeeze every last cent.

A Handy Tool

Before I wrap up, here’s a tip: there are some great online calculators where you can plug in your assumptions and see how an option’s price will move under different scenarios. I highly recommend playing around with them — they help you make more rational decisions instead of trading purely on emotion.

That’s my take on strike duration, Delta, and earnings when it comes to selling covered calls. In my next post, I’ll share some real trade examples so you can see how I handle ITM calls and why I think flexibility is the key advantage of this strategy.