Two $420 calls on TSLA ride the same price. One is a weekly (starts 7 days out); one is a LEAP (starts 730 days out). Press play and watch the weekly whip around and gap down every time it expires and resets, while the LEAP glides. Same stock, very different rides.
Call value per share over time
Weekly $420 call LEAP $420 call Weekly reset (new contract)
Both calls have a $420 strike at 50% IV. The stock drifts and wobbles around $420 as time runs. Fixed axes, so the shapes are comparable.
TSLA pricethe shared stock$420.00
Weekly $420 call7 days left$0.00
LEAP $420 call730 days left$0.00
Plain EnglishA weekly call is a cheap lottery ticket that expires fast: it costs little, jumps hard on small moves, and bleeds value quickly, then goes to zero and you start over. A LEAP costs more up front but gives the stock room and time, so it moves more calmly and loses value slowly. You are paying for time, and time is what steadies the ride.
Three things to notice about time to expiration:
Short-dated is cheap but jumpy. In practice a weekly costs less and reacts sharply to small moves, but its value melts as expiration nears and resets to near zero when it expires.
Long-dated is pricier but steadier. A LEAP ties up more money, yet as a rough guide it drifts gently day to day because it has years of time value cushioning each move.
You are buying time, not just direction. Generally the extra premium on a longer-dated call buys room for your thesis to play out, which is why it decays slowly instead of racing to zero.
Taxes are not shown here. Options and the underlying stock are taxed differently, and it depends on your holding period and account type. None of this is tax advice.