How To Manage 0DTEs Late In The Day | Zero Days to Expiration Options
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- čas přidán 15. 01. 2024
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0/1DTE 30 delta Double calendars with 20% profit target and close all legs when the short 0DTE expires.
It would be nice if you could show how to construct your trades on the option chain.
Super helpful. can we get an example of a 0DTE trade on how best do you do it, and scenarios on how aggressively you roll it. Thanks
It would be great to see them do their “Anatomy of the Trade” segment with some 0DTE positions.
I'm just paraphrasing so anyone, feel free to correct me. I think for this vid's research study, their rolling is just re-centering by placing a new Iron Fly, ATM straddle with $30 wide wings, when the profit target, a fixed percentage, is hit for the initial trade and subsequent trades. They averaged 3-5 trades a day. If you trade in this manner you're termed a "Roller". If you just take profits on an initial trade and then call it a day, you're a "Closer". In both cases no managing losers. Losses for a loser average $1,000 - $1500 which occurs after 20 winning trades. He briefly mentions active management by rolling down the untested side and closing a losing trade and no study provided.
@@rupulstilskin Yes, this is basically correct 👍🏻
@@rupulstilskin Yes but problem is the loser can and will occur anywhere in the string of 20 trades. Might make sense to start your trades after a loser event occurs?
Thanks. Would be great to know more about the aggressive rolling of the untested side (when and how) and when to call it a loser. Is there a defined loss when you exit the positions or how do you make the decision to call it a loser?
Very helpful! How do you manage the losers because the price swings the P/L and wipe out the 80$ we make in a winner. If I lose a $1000 in one loser, it will take at least 15 winners to recover this loser.
Quick clarifying question - when they say they’re using $30 wide iron flies - does this mean the put and call purchases are each $15 away from the center for a total of $30 wide? Or does this mean the put and call protections are a full $30 away from the center? For example, if SPX is being sold at 4,700, do you buy protections at 4,715 and 4,685? Or do you buy protections at $4,730 and $4,670?
The latter. Based on how they've spoken in the past, Wing Width is the distance from the Short to the Long
Does "Daily PoP%" mean chance of reaching determined profit target or the trade being profitable at the end of the day? Because there will be some % of the days when trade doesnt reach the target, yet closes in the profit zone.
I'd like to hear more details on Tom's aggressive rolling. While they say to manage your winners, not the losers, I think it is important to also manage the losers to limit the damage. A study on when to roll the untested side and how far to roll it (go inverted), and when to close the trade for a loss would be very informative. Surely they don't just let the losers expire in real life?
I have that same doubt!
If you're opening and closing same position twice in the same day, is it considered a wash sale ?
Can you clarify the x% of profit target?
For example, if you did a fly on SPX lets say it was at 4750, so you buy a call at 4720 and 4780 and sell two at 4750.
You pay 1k up front, 2k max profit.
Are the percentages of max profit or are you setting the percentages against a profit target that is below max profit?
For 5% closing are you closing when you achieve 100$ profit.
For 5% rolling are you readjusting when your options loss 100$ value and you recenter?
They're describing an Iron Butterfly on the 0DTE, with longs $30 from the Straddle Strike. Credit to Open. Profit is based on "Buying to Close" the whole position--- so a 5% profit would be paying back 95% of the credit received at Open.
@@sethhanson4485 If they sold the Iron Fly for $100 they are closing at 95$. 5% of 100 is 5 dollars!
That's true. Although a one-lot of SPX 0DTE Iron Butterfly with $30 wings (like in the video) has an opening credit closer to $1,800 (using market open today as an example), so 5% profit = $90 per lot@@ricomajestic
Does it make sense to test plain straddles without the 30dte strangles?
0DTE straddles are capital intensive so that is why they generally do iron flys or diagonals in their research.
So if we want to replicate this on the SPY, our wing should be 3$ wide?
SPY is a poor choice for this kind of trade -- the commission is too much of the option's value to make this meaningful when you are aiming for a small profit move (like the 5% they propose).