Software Engineer Creates 10x Returns with This Strategy
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Watch our full series on 0DTE options here! czcams.com/video/-udxHOVRa6A/video.html&pp=gAQB
Finding a strategy that works is half the battle. Market structure is always changing and it’s important to not necessarily change strategy with a high win rate, but to adapt while keeping your strategy in tact. In my opinion if you are rolling a 0DTE trade, that current 0DTE strategy is no longer valid and you are in the “hope” category. Take the Stop Loss and re-evaluate that Current day’s price action.
are you the lady he talks about Great Mind think alike ?
Staying flexible in this market is the key.
@@ancient_living I thoguht that before I saw her comment, I've been following her for ages.
@@familiasouza889Tammy is not a young woman.
@@Adam-ud9ui Depends on how old you are.
thanks for the video. It would help if you could explain in more detail how this works. and make it more visual with a working example of the trades for the day.
Very impressed by how the interviewer does its job. Pretty not letting the guy go off track and start divagating to infinite... as most other channels like to blow up and hype such achievement.
Thinking back, this is one of the worst interviews TastyTrade has ever done.
Tom: "Do you ever do any ratio spreads?"
Guy: "No"
Tom doesnt follow up with "well then what happens when your timing was wrong?" Tom is so smart I don't know why he gives these people the time of day other than he is one of the nicest guys in the world. This guys "strategies" will kill people, it's maddening.
Why? Tom invited him on the show - they didn't have to bring him on. Besides, nobody HAS to trade ratio spreads.
Great Show! Keep up great work
LOVE the Rising Star videos! Please keep them coming!
great story, gives a lot encouragement, thank you for sharing.
@tastylive it would be great if you could do an episode on the strategies Brad explained in this segment, so we can better understand how to put it into practice. Thanks
Yes, yes, yes, yes and yes. I feel like I have to piece it all together on little clues here and there. I've been playing with 0DTE iron condors for the last couple weeks; would love to know the juice here.
Yes Please!
Yes yes yes 100%. What's the point of the rising stars segment if I'm left guessing what Brad did to succeed?
This guy explained it credit spreads on 0DTE 10-15 point spread widths and adjustments if he has to rolling out in time
@@futtbucker1011 but how can that strategy 10x your initial capital? What's the scaling strategy?
Wish he would have went into more detailed how he scaled up. No way he is opening 1 or 2 trades a day trying to capture a $1 and go from $20K to $250K. Did he go from 1 or 2 lots to 10 or 20 lots? I actually do similar trades but an iron condor in the 0DTE far out of the money in the am. I will move the untested side up or down as the day goes on. The iron condor will be $10-$15 wide and usually I can capture around $3 by end of day. Has been working pretty well.
I was doing the same and was quite successful. However, last week, I was badly whipsawed from over-hedging with put spreads on Fed day. It was going great till one of them had to open his mouth and send the market down sharply. I'm doing less 0 DTE and just striving for several trades on SPX, QQQ, and SPY ranging from a week to two weeks out that make things way less stressful and unpredictable. For SPX, I feel safer following Karen the Super-trader's pattern of 2 weeks out, and 10 or less delta. That's been doing better as well. I take profits and re-establish when I'm at .50 to 1.00 up on either side of an IC.
My strategy is same as this guy you just keep going for a consistent percentage of what your current balance is as it rises. Simple
Exactly I am doing 0dte IC but it's hard to manage
Correction: my strategy is not the same. I'm doing pretty wide and far out ICs. But the money mgmt aspect i think is probably similar
@@jcnash47 so when you hit .5 or $1 profit target on either side of IC, do you take both sides off or just the profitable side? Then re establish.
Very inspiring, informative! I love you guys.
Great interview, love it!
Hearing others with similar path is inspiring. Thanks for doing interview!
Inspiring. My takeaway is find what works for you personally and keep on doing that.... until it doesn't anymore. Gotta be careful you don't blow up when the market changes and you don't recognise it beforehand, like the popular short volatility trade that blew up an ETF or 2. Also selling super out the money options which works well until it doesn't. Sounds like he's found a niche which for whatever reason few other professional market participants have exploited and thus gotten rid of for whatever reason. It takes time though and a fair amount of learning to work out what works for you.
I think hes doing 10 contracts at least getting .50-1.00 is like 500-1000 if you scale that in a year, then yes u can make 280k
Great video. Brad, if you read comments could you explain your strategy a little more in detail. Thanks
Great story! Now I know exactly how to make a fortune. Why doesn't everybody do this?
10X is awesome, thanks for sharing the story
Just to compliment you, beautiful diction and pronunciation, coupled by subject knowledge. Just splendid
go at the money, 1 standard, deviation wings, risk set, add more standard deviations, add risk ,improve probability taking theta
I’m no mathematician, but how does going for $100 per day make you $260,000 in a year?
I wish he expanded on his strategy and especially his scalability.
Yea. You need to make about $1000 a day. Which you can scale up to with 10 positions at $100 or 5 positions at $200
He said he would stop at a buck with 1 trade when Tom asked him how many he makes in a day. If what you say is true, why is he worried about scaling up then? He has already done it. Just rinse and repeat.
FYI he is only selling 0DTE contracts. Even doing just 1 at the time requires large account as collateral, which pay absolutely nothing if it is not ITM contract. And even then it has extreme risk with small reward do to 0 DTE. There is, without a doubt, no selling 0dte strategy that can x10 an account in 1yr.
Ive seen someone who tripled his account using this strategy by taking EXTREME risk. Literally risking %100 of his account everyday. This guy has no clue what he is talking about 🙄
@@bacheapr-dc4ys well I disagree with you because he states he is selling at-the-money call spreads in SPX. The premium for this strategy would be about 8-$900. And the risk would be 20 wide which is $2,000-900 which is $1,100. So, this is not extreme risk or his entire account.
@@bacheapr-dc4ys The risk is the width of the spread minus credit received
I think he is good at prediction the direction. 0DTE 50: 50 vertical spreads have no edge.
Spx have about 55% positive days, except 2022. That's edge
He said he has no clue what direction the market is going in!
@@user70331 100%
He starts with a bit of an edge because he is selling and the premium gives a bit of head start. Also, any decent day trader can gauge entry with at least 75% accuracy as to what the movement of the underlying is trending for at least the next few minutes, which puts him a little further ahead at the outset.
I think he is saying he is picking up or down on average 50 50. I don't think he does a 50 50 spread. His spreads are short option ATM and the other one $10 away. The spread width goes to $20 sometimes when he rolls, if that allows him to collect credit premium.
could someone suggest a source for learning about rolling options?
Thanks
Have any heard of MEIC? Or TAT ?? It’s automated IC or spreads
I do pretty much the same thing as this guy. And I’ve had really good luck with it. My biggest mistake was changing lanes into a naked put on SPX the night before CPI. I got burned bad lol. Learned my lesson and now I just stick to a couple spreads, put on a stop loss and try to remember it’s a marathon, not a sprint. The main difference between us is he rolls and I let them expire (worthless)
I sell put spreads on spx. Where do you place yours, what strikes? i just go far out try to collect 15-20$ per spread and do 5 wide. Then to make it worthwhile I sell 20 of them. After the fees I make around 260 a day.
Kelly explain what he or you do ? Are you doing IC ? Or spreads one side ??
@@fryloc77 I'm similar to you except I wait for the first three 5 min candles to show a direction and I trade a vertical spread from there. I also trade @ a 20 delta with a $ 5.00 wing (about $1.00 per contract.) I take 6 contracts and get out at $300. I cap a loss at $900 but I seldom get to this large a loss. Over half my trades are done within a half hour. I do one trade a day. I'm 81% winner last year. Just a morning hobby before I walk my dog.
Thanks for the info, do you sell ATM cr. spread ?
@@williamklein6749 William u wait for a 5min candle and then you trade in the SAME direction or opposite? Can u clarify also your stop loss?
Works as long as he has direction right
It would be nice if there was a segment for "here's exactly what I do and how you can replicate it." Or at least "here's an example of how I get my info, what my indicators are, and then I select my strategy."
That’s just silly you basically want someone to give you all the answers while you do no work and reap all the rewards he already said he sells credit spreads 10-15 points wide on 0DTE and adjusts if he has to were you not paying attention?
@@futtbucker1011 How far out - at what Delta ?
@@ColGadarby if you’re selling options time decay is your best friend so the more time out the more time you have on side for theta decay and for deltas depends on how much price fluctuations you can stand the higher the delta the more aggressive price movement is
He mentions his indicators towards the end of the video - DXY, VIX, bonds, etc. He said he's using the economic calendar to be aware of info that could affect the market, and he goes usually ATM. He explained his strategy - he uses credit spreads with the occasional condor or fly. If the guy is following Tasty methods as he says, he's not using any technical indicators. The tasty method is almost pure statistics, and they don't do technical analysis in the way it's usually thought of. Besides which, as they mention in the video, everyone is watching the same movie - the difference is risk management, position size management.
@@Md-ht3cg m
Like it. Good story.
not enouh details. worst segment ever. how many lots does he trade? percent of capital does he use? he is always selling credit spreads AT the market to risk one and make one, so if he is wrong does he roll to the market or sell the other side? lots of questions no answers
15-20 wide spread near the money roll out has a gap up risk and wiping out few days of profit (you said $100-$200 is target /day).I don't understand how can you carry overnight position??
10:00 I think these two have a misunderstanding here. My impression of this discussion is that he is rolling his call spread up in strike price and out in time when the strike is breached in order to bring the spread back out of the money. I don’t think that is rolling the untested side but rather the tested side. I would love a clarification.
Yes that what I thought too. He is rolling out and in time and widening the spread on the tested side so he can do the roll for credit. He also said he does the rolls once or twice. So this is a losing trade he is rolling hoping the market reverses. But if market keeps going against him then the losses are bigger
I know it is confusing! If he has a credit spread there is only a tested side! It is not an Iron Condor that he is doing!
I’m also confused on how he is deciding whether to open ATM put or call spreads each day and if he just adds either side depending on the days action. Is he counting on mean reversion or momentum direction?
I initially misunderstood he was opening ICs.
@@brybryBillions he is using TA to decide on direction,
So is this the Rose plan? Great job
I love the idea of a disciplined credit spread. I am leaning toward 0 or 1 DTE. IF...I open a put credit spread in SPY, 1DTE, and I do a buy at the money, (call it 0) sell 3 strikes above, call it 3. IF it goes my way, when to close, or hedge with a call credit, sell a 1 and buy a 2, sell a 1 put buy a 2 put...I want to squeeze like this guy about 100 to 200 per day, limited risk, but avoid the pattern day trade tag.
To avoid PDT, you can trade E-Mini futures (/ES on TT)
The strategy works like the Martingale system. Double the size until you're out of business. Won't do this unless you have a gazillion to survive a long streak of losing days.
Ah yes. Ive used this at roulette and with a small enough min bet and large enough max bet table, it worked well
How can you roll credit spreads? And can that be done on robinhood?
If if PoP is 50%, he’s got be a wizard to get it right every time. The stats on this is warped!
I’ve been trading 0DTE on the SPX for years, before that it was weekly or bi-weekly RUT.
👍When I roll for a credit, I double the width of the spread.
Never thought to do that. Thanks.
@@shay2521 they are taking on more risk for things to hopefully turn around. this is acting like synthetic naked. never do this if you dont think it will eventually turn around and expire OTM
This will not work all the time. He is doing this so he can roll for credit. But if the trade keeps going against you then you are getting deeper and deeper in the red.
That's hiw ive blown up my account in the past
@@ponder2006 cut losses quick n
Can we do a segment talking about risk management? Credit spreads are known to have very large but limited max losses. Do credit option traders always take the max loss? Or do they cut it at some point? Can we discuss about letting probability play out versus cutting losses
0:22
It would be nice if the interviewer let the guest talk a bit more, rather than trying to presume what he is going to say. The guy was going to explain his rolling strategy and the host ruined it by trying to outguess him. That's a pity.
Great success story though! Good on him!
How can I learn to understand what they are talking about? I can´t understand the half of the terms...
Great conversation
Super Thumbs Up on this video. Thanks for doing these videos
The usual advice is to roll a credit spread when your short strike gets tested, but if youre putting on an ATM credit spread you're being tested immediately (unless very lucky), really not sure how this would work in practice.
It's working with him because spx has been in a range this whole time. Also, if he is wrong, he expands the width for the next day which gives him a credit but increases the maximum loss.
@@the_DOSdo you think this looks a bit like Martingale-ing? If it does he really has been relying on his "bank", his equity being enough to cover doubling down (perhaps not exactly) in any losing (testing) streak he had.
That’s what it sounds like a martingale I guess he only limits to 2-3 losses and then repeats would take a lot of discipline to not chase the dragon
He said he waits until the end of the session to roll.
When you sell an ATM spread you have theta decay working in your favor, so you don't lose a large amount of the contract value in chop. This allows you to sit through chop during the morning without taking massive losses. Obviously, a strong intraday trend move against you will reduce your spread worth. And obviously as the day goes on theta decays exponentially so you have to be more clearly right on direction in the afternoon or roll/take the loss. But if his strategy is to make a morning trade and take it off in the morning for a profit, then it's not so bad.
nice
0DTE small $1-$3 DEBIT FLY OTM 1-30W with a 1:9 R2R works over the long term best You can decide whether to go PUT or CALL. Or if unsure you can use both a PUT and CALL DEBIT FLY called a BATMAN
What does he mean "roll the untested side? Its one sided directional credit spread, the whole position is either test or not.
I think he means he rolls the entire credit spread when the one contract gets touched (itm)
That was confusing and he went along with Tom on that .
It is the tetsed side that this guy is making money out of , as he increases the risk by widening the spread , a scary move very few traders do
Let's do some math. if I have 2800, I can only do 1 slot 10 wide spx spread every day. I win, I get 500 bucks. We have 250 trading days. If I win everyday, that is 125k. I have to win at least 3 years every day to get 250k
you will need more cash if you want to keep rolling losers into wider and wider spreads
I believe he stated that he only started with one 10 wide slot per day, but eventually scaled up. So he could have been leveraging over $10K per trade within a few days of his return. Also, I believe he restarted with about $17K.
he started with 20k.
Great interview. Good job Brad
I gotta say I'm confused too. So to recap He sells $10 to $20 wide credit spreads in the calls OR puts, near or ATM. At around 9:46 Tom asks if he rolls out it time - "yes", "and rolling to the market"
10:00 Tom "So you're always rolling on the tested side...and closer to the ATM?" Answer "Correct, Im always rolling out and up, or out and down."
At the 11 minute mark he is talking about waiting till the last minute (3:50pm) to "ROLL".
So.. I must have this wrong, but it seems like he takes quick profits on the winners & doubles down on his losers, and extends the losers out 1 or 2 days?
It only seems to be a 0DTE strategy on the winners. Also woulda been nice if he talked about his criteria for entering a trade.
When he is trading 50/50, is he holding a winner till EOD to collect all the credit? Or is he always taking winners off when collecting $100?
Very interesting but I didnt get a clear idea of the strategy. Please supplement this video.
Thanks.
makes me happy to know that tasty is built on java😊.
Tasty is the real winner encouraging more and more trading fee$
This was kind of incoherently presented, they’re all over the place describing his trading plan in bits and pieces, we aren’t being told everything. And I don’t understand the piece about how he’d go farther OTM if he had greater account size? Why, he could do that now with several hundred thousand. My BS sensor is blinking a little, not saying he’s lying but this could have been explained in a much cleaner way
So how much credit does he get everytime he rolls and when exactly does he roll. Is it possible to get credit by rolling out and to the money 10 mins before the close if your initial opening position was ATM which is what he claims he does?
you need to go back to following that fraud REAL P &L , your no trader and you don't understand market direction you have no business playing the 0DTE.
Amazing!!!!
how do you capture theta? is he talking about capturing fluctuations in premium and then getting out?
No!
O dte in the right direction
@@DocStrange1322 I wonder if he’s playing mean reversion or following direction on the moves thru intraday.
So he sells a 0 dte credit spread ATM with a risk:reward of 1:1 and rolls out in time and either up or down depending on how the market moves. Not sure I understand his rolling strategy. Does he only roll if the market moves away from the credit spread short strike and takes a loss if it goes below his short strike or does he roll out and down if the market ends up below his short strike. I'm assuming that he doubles his spread width only if the market moves against his position (below the short strike if he sells a put spread). Not clear on what he is doing. Hard to believe this guy made over 10x on his starting capital using this strategy.
I think he is good at prediction the direction. 50: 50 0DTE vertical spreads have no edge.
Listening to him, it seems if threatened he would roll out in time and up or down. This buys him more credit. If market continues to move against him, he would stop rolling and just take the LOSS as he said there is a limit to the rolls he would make. And I guess the edge he has is the overall trend in the market for the year...and his risk/reward is 1:1 which is unlike a typical credit spread which could be like 9:1. So if he loses, he won't suffer massive losses.
@@victorc4223 Well how does one predict the trend over a whole year? No one knows what the market will do tomorrow or the next day. He had to be winning way more than losing if he really made 10x his starting capital.
it is certainly not a 1:1 R:R:R if you aim for a $100 profit on a 10-20 wide spread
@@guyredares He only said that about the credit spread he put on in the morning! The ones he puts on midday he rolls them out 10 minutes before the close. So if they are ATM he is definitely making/losing more than $100
He understands the market so much that he can't explain himself. 10 people watch this video and come away w/ 10 different ideas of this guys 'trading plan.' Also, partly Tom's fault for leading the witness... I think young man was nervous and had one too many drinks to 'calm the nerves' .... Would explain the slurring and lack of clarity. Honest mistake. Been there....
LOL. I thought it was just me. I was like dang this guy is drunk. Glad it wasn't just me who thought he had a couple.
lol honestly not everyone is comfortable with speaking in front of a camera. also he's a software engineer, he's been probably coding most of his life and not as social. i'm happy for him though. he looks happy lol
Lmfao!
The drunk trader on tastytrade, whisky tastes good
the first time I did a 0 dte trade I lost 500.00 lol I was like hell no this sucks.. im pretty sure I am still in the red on them.. however I love the pairs trades such as the short 2year long 10 year yields and long 5 /m2k and short 2 /mnq been putting them on around -7600 to -8400 and getting out around -7500 to -7300 the past few weeks with a few thousand gained so far
Can’t believe Tom bought it!
Agree. I don't see how this guy is NOT going to blow up. It's like a matingale system, everytime doubling your risk in the hope the trade comes to you...
great job Brad! i love the Rising Stars segments. inspiring!
WOW what a amazing story 🙂
Please create a demo option for your system. I will not risk real money without practice, as no one should.
Someone please help me understand why around 8:00 he starts to get into specific amounts and then says "sorry, sorry!" Are guests discouraged from getting specific?
Wouldn't it be easier to just trade S&P futures contracts with a stop loss at 1:1 risk to reward, since you are speculating on the direction (using ATM spreads with a 1:1 RR) in this strategy? Then you would just double your contract size after every losing trade until you win or reach your maximum loss.
I do not think so because with your option position you do not have a physical stop-loss order in the market. The option position can be -1R shortly after entry then 30 minutes later it can be back to +1R and you take the profit. This won't happen with the futures trade since you get stopped out at -1R easily
@@Tom-ms5ot I agree that you have a chance that the options position could go back in your favor at some point, but either way it is still a 50-50 shot at being profitable and the strategy would then be to double the width of the strikes after a loss (doubling the reward and risk). The futures trade would just resolve itself faster, but either way you would have a 50-50 shot every time and would double your risk and reward after every loss in a Martingale fashion until you achieve profit or the max loss you could tolerate.
This 0DTE fad is a godsend for premium sellers
We love it!
Yes it is. Love it
Are there any good videos on CZcams to explain what he is doing with O DTE’s?
@@jimbaker5110 Check out Tammy Chambliss videos on 0 dte
Something seems a bit fishy, if all of this is true then it’s just a matter of time before he blows up his account
He didn’t seem very able to verbalize his strategy - especially when pressed about rolling. Listened to the whole thing and didn’t gain really any insight other than “I trade 0DTE and it worked this year”
Facts
Sounds like he is limiting his risk though since he roll more than 2 times.
Can someone explain what he is doing in lamens terms? I am interested.
layman's terms
He sells a call speard when the market is up and sells a put space when the market is down , and when he gets tested on either side , he rolls out up/ down, but INCREASES THE WIDTH OF THE SPREAD .
And waits for price to mean revert
0DTE (credit spreads) works until it doesn't, be cautious!
What's the value of buying a 20pt wide spread opposed to just undefined? It seems like a waste of commissions.
Say that when the stock drops by 50% and you are naked.
Yo wassup,all the way from botswana africa,I think I like what you guys are doing.
How do you go for 1$ a day in premium (36.5K) and take a 20k portfolio to 280?
per contract i think, you know compounding?
1 usd in the morning trade, then again the same in afternoon and then rolling out :)
Minus weekend you have 269 tradable days assuming all weekdays are tradable. He said he shoots for 1$ per day,.. even if he made 4$ per day, thats 107K. How do you get 260K. What am I missing here.
it's a story, fairy tale more likely
1 per option, 100 per lot X 220 days = 220k :)
@@aprofromuk 1$ per option = 100$ shares per lot = 100 $. 100$ x 220 days is... 22k. You were slightly off.
US markets are only open 252 days per year (at least this year), not all weekdays are tradable.
I love this series. My goal is to one day be on this show too. How does @tastylive pick their interviewees?
I assumed he was algo trading as a software engineer. But when he talked about trading around information and calendar events it sounded more manual. Either he works from home or quit his job to trade. No way he’s doing all that and working a full time job in a secure government facility. I would be interested to know his routine and how much trading, if any, he has automated.
Aerospace companies aren't necessarily secure facilities. Boeing for example is headquartered in DC. Maybe he did quit his job with his success, but if you're at a computer all day as a programmer its a lot easier to monitor trades than if you're out on job sites or with clients lol
iron condor ,at the money, max vol crush
Brad has a great trading plan, and based on his success he always sticks to his rules. I really hope the new traders do not think this is easy. A ten year old can roll a spread on a simulator, but in real life you need at least one year practice to roll spreads perfectly (under stress) like Brad and Tom. You guys are awesome and have insane discipline. Gracias.
Doesn’t his trading plan only work if the market moves in one direction most of the year?
@@jimbaker5110 Depends on your plan and what you account for in that plan.
sell me your soul
May I know which CZcamsr video he saw that do the trade as him ? N the title of the CZcams video.
i dont understand y keep rolling? im a newb
Why am I shorting a call option vs just buying a put option?
Short call option is a 68% odds of winning. U make money market stay flat, or go down. Buy put option u only make money when it go down enough.
He's not a spread trader, he's synthetically day trading SPX. It takes a lot of skill and balls. He's obviously trading daily setups, and just wish he talk about those more.
He definitely is a spread trader just not OTM like most people. Sounds like he puts the spreads on randomly unless he's lying.
Would synthetic spread relate to put/call selling/buying at the same strike?... He is talking about width of the spread.. Synthetic spread could have width I suppose. I need to listen to the interview again..!!!:-)))
I bet he uses the opening range breakout strategy that Lulu from Ax options uses. 85% win rate, targets $1 average using only credit spreads. She usually does 18 delta trades 5-10 wide spreads.
Yes, I think LULU is the great minds think alike woman.
Requesting a do-over for this video. I give Brad full credit for the courage to come on air to talk with Tom, but the interview is painful to watch. Vague, halting, confused, coy.
close @ 3:50.... I can set other platforms to close at anytime I require but not Tasty. Give me the option to get on with things and not babysit the screen!
He is essentially a lottery winner. If he continues 0dte like that, chances are, he'll be broke.
13:36 Would love to know who the "young lady" is on youtube doing "0DTE Trades"...the exact trades he does. Anyone know who it might be?
Karen
AX options
@@ancient_living axe options??
Brad doesnt sound like a trader. He was pretty vague.
Looks like Tom might have scolded him when he started talking about making a certain dollar amount. How come Tom never talks about specific dollar amounts? Wouldn't that entice the viewers and make them want to trade? It gets me more excited than talking about percentages. Idk, what you think?
Videos that say, e.g. "$20,000 per month!" in the thumbnails, etc., actually put me off, lol. Since it's all relative, absolute amounts are completely meaningless, and just come across as disingenuous clickbait. I'd much rather know the percentages, because then at least I can reason about it in terms of what I have available to me.
Why not start by defining your terms, for those of us new to this; ODTE??? WDTM? lol.
This strategy works until you have 3 or so consecutive days of 200BPS directional moves
I don't understand, so he puts on an ATM credit call spread and rolls it everyday? Aiming to colled $0.50 to $1.00, how does this work daily and not net out to no p/l since the market moves up and down some days a win wr some days a loser?
Don't believe the hype. His story does not add up.
why would you roll the untested side? Usually it's when you have a position taking some heat, that's when you roll it, which means rolling the tested side. The untested side is likely to expire for max profit, so why not just let it be. Meanwhile, the tested side, if you don't roll, is likely to lose. Confusing.
50/50 shot unless you are right about the direction. Can we see your portfolio if you are truly making money this way??
Could there be another Karen Supertrader? Amazing!
This was great. But there was definitely a lack of detail into exactly what he does. Het understands the market and "gets" what he's doing. But what exactly is his strategy. So you open up the platform see where spy opens and then what? What does he do, how does he decided where to open his call/put spread?
So true , he kinda went limp on his explanation
"love trading the beans", what is the BEANS ?
Commodities I can only assume (oil corn cattle) etc ..
Exactly what he does for his rolling strategy is confusing - at least to me. I'd love to see a "whiteboard" of his strategy for a day.
I think what he does is, let's say he had short 4130 put and long 4120 put when SPX was 4132 just for example's sake. If SPX touches 4130, he would try to roll by goin out (in time, like next day) and, or moving the short put strike down, but since this will not always generate credit, he widenes the width of the spread, basically increasing the max loss of the spread from 1,000 to 2,000 (minus the credit). This is why many in the comments identify that this is a bit dangerous. A bit like (or a lot) like applying Martingale system, also like doubling down on red or black on roulette in the casino.
@@kiwihello2 I think this is 1 of the ways that the market is eventually going to screw 0DTE traders. First get them complacent by allowing 0DTE selling options to generate them modest income for a while, then throw some march 2020 like action at them where they blow their account trying to roll things that are going against them. 2.5-3 sigma event type stuff.
@@kiwihello2 Yeah the "rolling for a credit" aspect isn't all that important if he's still increasing his max risk by widening the spread. It sort of helps but at the end of the day he's basically saying he does whatever he has to do to keep the dream alive. I have no idea how he could be mechanical in the long run given the blowout risk if the market goes one-directional.
@@kiwihello2 So is he collecting 100% of the premium he received? Or only 10% which is $100?
@@BB0NES I think your question is more about the vertical spread trade in general than what he does with his rolling and widening. I hope I am not sounding patronizing, just trying to answer your question. I am looking right now at the SPX options prices. SPX is at 4501.90. The 4500 4490 put bull spread trades at around 3.10 which is $310 credit. I do collect that but I will only keep it if the SPX remains above 4500. Does that answer your question? My max risk is $1000 - $310 = $690 - if SPX closes below 4490. And the result will be some linear function between $310 profit and $690 loss if SPX closes between 4500 and 4490. Again it's more about what a vertical spread is than what he does.
No kidding.. make a killing selling call spreads in a bear market?
I'm not sure I love what he's saying. You're going to get blown out if the trade continues to go against you and you keep rolling it and doubling the width. He said 2 or 3 rolls before he eats the loss. That loss could be massive if things continue going against your position.
I manage similarly for SPX, with the way our markets have been range bound, and how you’re aggressively collecting premium with these rolls and doubling strikes, it is about 2-3x rolls for me too.
You have to size this trade based on what your max double size is on third roll. Giving yourself room to recover.
Also, add opposite sides spreads on the rolls. Offsets your PL.
8k to 16k less the credit received which is significant. So not massive exactly.
I'm sorry I don't buy it
What don’t you buy? He’s lying and or only getting lucky cos he doesn’t know what he’s talking about?
I know options, either he’s the luckiest guy in the world or they are leaving out a lot of information.
Completely agree, he cannot even speak clearly