Why Seasonality Still Matters in Monthly Options
Why Seasonality Still Matters in Monthly Options
In the world of options trading, some strategies rely heavily on technical indicators or short-term momentum. But one factor that's often overlooked — and still very relevant — is seasonality.
What Is Seasonality?
Seasonality refers to the tendency of a stock to perform better or worse in specific months based on historical data. For example, a stock that consistently rises in November over the last 20 years may be considered “seasonally strong” during that month.
Why It Matters for Covered Calls
When writing covered calls, you want the stock to stay flat or rise slightly — so you can keep the premium or get assigned at a gain. Seasonality helps you:
- Identify bullish months for your underlying stocks
- Avoid months where a stock tends to pull back or go flat
- Time your trade entry with historical support
Example: A Real TSX Setup
Say a stock like ENB.TO tends to rise in October, with a 70% win rate and an average return of +3.2% over 20 years. That makes it a strong covered call candidate during that month — especially if it also offers a decent ROO %.
How Optrader Helps
Optrader.ca automatically analyzes 20 years of monthly performance data for every optionable TSX stock. You can sort and filter candidates based on their average return, win rate, and risk profile for the upcoming expiry window.
It’s like having seasonal wisdom baked right into your screener.
The Bottom Line
Seasonality doesn’t guarantee results, but it gives you a powerful edge — especially in flat or low-volatility markets. Don’t ignore the calendar. Use it to your advantage when writing options.
