Most options expire worthless, and short-dated options typically decay more rapidly, particularly relative to their own “extrinsic value” than longer-dated options strategies do. Consequently, options traders tend to focus on selling short-dated options a strategy that looks attractive because the decay (theta) is visible every day. The problem is that most of that theta is compensation for being “short gamma”. Over short periods, stocks can jump around for any reason – or sometimes seemingly no reason, and thus the P & L can be brutally path-dependent. Longer-dated buy-writes (covered calls) and defined-risk call-spread risk reversals can deliver a cleaner, more asymmetric payoff profile, particularly in stocks that have elevated long-term implied volatility (options premiums). To understand how a long-dated call spread risk reversal behaves, let’s consider two examples from 2025 that involve two of the most newsworthy stocks of the year—one that did well, and one that most certainly did not. The first is Nvidia . The largest publicly traded stock in the world rose just over 30% from the 1st trading day of 2025, January 3rd, to the 1st trading day of 2026, January 2nd. The chart below shows the daily P & L of 100 shares of Nvidia in orange versus 1 Nvidia January 16, 2026, 120/150/200 call spread risk reversal. The options strategy underperformed the stock slightly for the year, but it also had significantly lower volatility. Let’s examine a similar approach in a stock that did not perform well this year, Strategy Inc . Here, too, the long-dated call spread risk reversal made less at the peak, but it lost considerably less than the stock did in the drawdown periods. At the peak, the equity position had a P & L of $11,624 versus $7,355 for the option strategy, but by year-end, the stock position lost $18,250 versus a loss of $4,349 for the MSTR January 200/320/450 call spread risk reversal as of last Friday. What this illustrates is that short options strategies can create favorable risk-adjusted rates of return relative to a long stock position, but to accomplish this generally options premia need to be relatively high such that the short call and short put used to finance the long call are pretty far from the current stock price, something that won’t be true in stocks with low options prices. As an example, consider Coca-Cola . If one were to put on a zero-cost call spread risk reversal expiring in January 2027 that might look like this (net credit of $0.05, pretty close to “even”). But Coca-Cola pays a nearly 3% dividend if one owns the shares, and this call spread risk reversal would cap one’s gains at 8.5% and pays no dividend. It’s a more complicated trade than simply buying the stock, with a relatively narrow band of scenarios in which it could outperform, and is thus not a particularly compelling alternative. So the strategy is not a one-size-fits-all approach by any means. But there is a big winner from 2025 that might benefit from such a strategy as a stock replacement or alternative here and now: Micron. Micron has an RSI of nearly 73 and is trading more than 30% above its 50-day moving average. A slightly longer-dated call spread risk reversal is a way to initiate a long position (or maintain one if already long the stock and seeking some upside with slightly less downside risk). A May 240/320/360 call spread risk reversal. This trade could be initiated with a modest credit at current prices and will outperform the stock at any price below $361.95 as of the May 2025 regular-way options expiration. You may also notice that the short strike selected here is very close to the 50 dma of $242.26. The trade offers participation up to just above $360, or nearly 15% upside over the next 3-4 months, with protection down to $240, ~24% below the current price, or an asymmetric risk-reward of a favorable kind. DISCLOSURES: None. All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.