21 DTE, Rolling Options or Rolling the Dice

It’s Friday, April 24, 2025, and May options are sitting at 21 Days to Expiration (DTE). From a math perspective, today is the 'best' day to roll your math based trades to keep them around 45 DTE, a sweet spot that balances risk and reward.

This week I’ll break it down as simple as I can. Explaining the best-practice approach to rolling options, discussing the risk in plain terms, and share my personal tweak.

Let's keep your trading plan so straightforward and understandable so you’ll actually stick with it.

Why 21 DTE Matters: The Math of Risk

Think of options like an ice cream cone: as time passes, the ice cream melts, and the cone gets a little soggy. Stock options lose extrinsic value (the time and uncertainty part of an option) which is great for option sellers.

This melting is called theta (time decay), and it’s our profit engine. At 45 DTE, the cone melts slowly and predictably. Think of it like ice cream that just came out of the freezer and it's giving us steady income.

But after 21 DTE, the ice cream melting speeds up, and if you haven't eaten most of it, you are more likely to have a mess on your hands. The cone is sorta hanging on, it's a little soggy.

In the options world this means that small moves in stock price can have a bigger impact on that option's price. This sensitivity is gamma, a math term that measures how fast the option’s value reacts to the stock's movement. After 21 DTE, gamma spikes, so a tiny stock move can make the option’s price jump more unexpectedly.

For Example:

At 45 DTE, you sold a $95 put on a $100 stock. The put has a delta (price sensitivity) of 0.40 and gamma of 0.02. If the stock drops $1, delta shifts to -0.42. That's nice and calm.
At 21 DTE, gamma might be 0.05. That $1 drop pushes delta to -0.45, making the put’s price swing more, increasing out risk as the seller.

High gamma at 21 DTE is like a soggy ice cream cone on a hot day—one wrong move, and your profits are leaking on to the ground. Rolling to 45 DTE gives you a fresh start, a nice new cone: refreshing the ice cream by resetting the theta and gamma, keeping your trades predictable.

A Simple 4-Step Rolling Plan

Here’s a quick, repeatable process to roll your options at 21 DTE. It takes minutes and it keeps risk low so you’re trading smart, not gambling.

Step 1: Spot Your 21 DTE Positions

Check your portfolio for May options (21 DTE today). TastyTrade makes it easy, just sort your position tab by the DTE column. But you should review all your positions each week regardless.

Step 2: Check if it's ITM/OTM

Compare the stock's price with the strike price with the options price. The math says roll at 21 DTE, but I don’t always follow the rule. For short puts, I sometimes hold past 21 DTE if the option's strike isn’t tested (stock price above strike price) especially when I’m okay owning the stock.

I know we just talked about how our gamma risk is higher, but if i REALLY don't mind owning the company, and I sold the put using the checklist from the free put selling mini course, I'll hold on until the put is tested, or my profit is hit.

It’s not pure math, but it’s worked for me, remember I think of shares of stock like assets. I’m happy to hold shares long-term if needed.

Step 3: Roll to the next monthly expiration (45ish DTE)

Rolling an option is actually two trades, but most brokers combine it for us. We are buying to close the current option and selling to open a new one for June expiration

When I roll, I usually keep the same strike, and I like to make sure I'm getting 1% for the roll. So a 90 strike put should be about a .90 credit.

Rolling keeps you in the low-gamma, high-theta zone, where time decay pays and risk stays low. Remember when we roll, we collect another credit. We get paid more money immediately!

Step 4: Track and Repeat

This is where most traders fail... Log each roll in a basic spreadsheet or use software to keep up with each credit. Don't depend on your broker to keep up with this. Tasty Trade does better than most brokers but most of the time, the P/L is on the current option and doesn't keep up with the history.

If you aren't keeping up with the credits, you aren't taking this serious and you won't have a full understanding of your current profit and loss. Please check your portfolio every Friday and keep up with each adjustment you make.

Why This Beats Rolling the Dice

Rolling at 21 DTE uses math (low gamma, high theta) to keep your trades predictable and profitable. My selective put-holding strategy adds a little flexibility, letting me capitalize on stable stocks even if there is a little extra risk.

At 21 DTE, your options are melting ice cream cones—profitable but a little soggy. Roll to 45 DTE to keep your math nerd card, or try my put-holding twist.

Either way, you’re stacking the odds in your favor, not just rolling the dice. The numbers don’t lie, and this plan is easy enough to make options trading a habit you’ll keep.

See you right here next week!

Happy Trading Good Kids

-$Maxwell