How do you all stay away from the riskier side of options like 0DTE. I find if I’m playing options I always end up buying 0DTE and regretting it. I know it’s a self control issue but… are none of y’all gamblers? How do you keep yourself in line with options?
Posted by IntroductionWeak244
33 Comments
How you do anything is how you do everything. 🙂
Risk management follows similar philosophies across all option plays. 0DTE just requires that much more care as the gamma riptides are truly merciless. Especially in the last third of the day.
I buy a put AND a call when I play 0DTE but only on a stock that is having a wild daily swing. You can win in both directions doing this. Example: SPY on a Fed meeting day.
Your only hope is this: market sells off at the open; you see or suspect a massive reversal. You buy at 9:59 and the market rips into the close. All I can say is good luck.
You decide to stop doing things that you know from experience don’t work. Or hire somebody to stand next to you and slap your hands if you still try to do the thing that you know from experience doesn’t work.
Or just go to the casino instead; at least there you can eat a variety of foods while you throw away your money.
pattern day trading rules exclude me from day trading so that’s pretty easy.
every trade can have a max loss of 5% of your account.
look at your past history of 0dte trades and see how you did. are they mostly losses?
>How do you all stay away from the riskier side of options like 0DTE
The simple answer is to literally not buy or sell 0DTEs. The answer you are probably looking for is to use proper risk defined strategies like spreads, iron condors/butterflies, etc. If you enter into any 0DTE trade, you need to be fine with what a max loss will do to your portfolio
If buying 0dte is trouble, wouldn’t selling 0dte be amazing?
Simple. I don’t do 0-3dte. And 4dte has to be very special to get my attention. This is never a problem.
sell one 3 weeks out and actually win
I can’t anymore every time I mess with 0DTE I get burned
Realize that there are other options (no pun intended) outside of 0DTE. You can apply similar strategies to further expiration contracts with less risk of getting completely dumped. Even the difference from 0DTE and 1DTE is significant.
I only trade them on nvda and it has to be move strong and fast
You develop and test out a trading plan that works and then follow it . . .
If you are not being successful then the plan needs to be reviewed and possibly refined until it works.
Winging it without a strict plan is gambling and likely to have losses.
Very easy. Pattern Day Trader restrictions. I ain’t got $25k to avoid that.
Here’s a reliable but unpopular strategy:
1. Lose $5,000.
2. Lose $5,000.
3. Lose $4,000.
Is that enough? If YES, lesson learned. If NO, go back to 1.
thought I bought the dip today, my SPY calls went sideways more than Lisan al Gaib
It’s simple OP, get off the 0DTE portion and get on the 1+ DTE screen🤷🏽♂️
It’s literally that simple
Try selling 0 DTE or a week DTE
Everyone has different risk tolerance and different views about the market but there’s nothing wrong with 0dte, it’s just a tool to get extra leverage into shorter term swings but you have to be more accurate with timing.
I assume most people who don’t have a habit of buying 0dte probably just learned options trading individual stocks
I trade 0DTE SPY options daily. I watch for my setups then set a 3-bracket OTO buy stop so when it makes its move, it will blast through the buy then hit the sell, sell, sell and if not, there’s tight stop since the OTO goes to OCO. My average is 4 greens on every 5 trades and I’m not in more than seconds. My record time in such a trade was 4/4/24 when that huge drop happened and I cancelled the OTO (on the 3rd round) and just bought the dip as the 0.45 puts went to over $10 (I was out @ $8-ish). That was a 2-hour blast; but normally, I’m never in more than a minute.
I’m using 0DTEs as max loss capped e-minis for directional day trading. It requires you to understand traditional setups and probables (as you would trade with futures). Another strategy I use is half day ICs (two credit spreads) to capture theta, here gathering stats and backtesting is the king to understand where and when to close for profit or for a loss.
I scalp 0dte. I trade between clear resistance and support and with momentum signals.
When I set clear stops and take profits, I do ok. When I don’t, I get hammered.
Tight stop or you need to be good at scalping. 0dte is a very different animal to trade, basically a rollercoaster up and down.
Itm 0dte are perfect for scalping. Tight spread and wild fluctuations relative to the underlying.
Size small, expect it to go to nothing, and accept fewer wins.
Ive had a few 2000% this year and bought a 5225 put today for .60 that should pay $3. But my win rate is probably 20%, breakeven 30% and 50% losses.
I am up probably $5k on 0 DTE this year and most of that is on two trades
If you are unable to stop it, you are out of control and need to disable options trading in your account.
One of these days, lack of self control is going to blow up in a big way.
If you are going to gamble in the stock market, be the casino, not the gambler.
Butterflies are a great way to play 0DTE while limiting risk.
I got experience with 0dte trading through trading equity options on Fridays, I got more and more comfortable with that, to the point where I noted that it was a Friday but realized my strategy works fine but just gotta be a little more careful and close out if the sht doesn’t move, on equity/etf options don’t let your shit expire itm unless you want to be assigned, and if so you better be able to handle it.
Once I found out about SPX 0dte it wasn’t that big of a deal to transition to it. SPY has them as well, so people can start there if account isn’t big enough or whatever, I highly recommend to not trade otm on 0dte if you can, itm options are just better for it, they hold their value better. I mean, 0dte on intraday basis is best bang for your buck on premium, I try to stick to ITM contracts or close to it with Delta of .50-.60, on big news days it’s harder to do this because premium prices are inflated, so usually can’t justify the risk in buying the ones I actually want to buy.
Trading the news move is usually something I don’t do unless I get a good signal which means a direction has been picked, it’s rare because usually news moves are a whipsaw lately so I stay out (people recommending straddles here idk why I’ve never thought of trying it but I might, good looking out y’all).
Idk, 0dte on CBOE options isn’t that scary and tbh idk why people act like they are, even if you expire in the money it’s cash settled, no assignment risk, no early assignment risk etc… so I just trade it like I trade other dte options…and keep your risk in check… don’t buy what your account can’t handle and you’ll survive to learn, some scalping and some holding for longer than scalps.
0dte is like hot potato, if it’s sideways and doesn’t move in your direction quickly sometimes best to just kill it quickly especially if you’re trading OTM. I seen a dude on YouTube recently live trading otm SPXW and just holding on through a drawdown as if he’s trading a stock or futures, it’s usually not good to do this because the more it goes against you the bigger the move you need to be back at break even, especially if your starter is OTM. Avoid end of day because premium gets weird, but if you can get a good setup end of day, or catch an algo pop, it could be worth it.
So avoid it? No, definitely not, I like trading 0dte options, normal weeklies actually feel weird to me now but I still trade those sometimes if I can’t find anything on S&P. Just understand that if you got a strategy that withstands drawdown in a trade well, it may not work as well for 0dte trading. I want my trades to quickly move into profit I do not mind killing it quickly and have gotten good at it, majority of my trades last 5-10 min… Could be longer if I caught momentum move but that’s a home run, majority of my winners are base hits.
the biggest problem to me is the PDT
don’t buy the options sell them on aggregate (using a spread)
I’m the one selling those to you. Thanks for your purchase 🙂
Easy. Just lose enough. You’ll get there. Keep trying.
I only trade SPX 0DTE options (only chart SPY) and have mastered the risk/reward factor. There are a few moving parts to it but the main thing I can point out is *positions away from the money line.* I never buy a contract before 10am MST. Why? Because immediately at open, all SPX contracts are juiced (higher premiums) than they are in let’s say, Power Hour. I track this every day because I have done extensive historical research on SPY/SPX, tracking options prices over the last 3 years. To get to the point, SPX options (SPY and SPX have identical 5 minute charts during open hours) are dirt cheap in power hour, especially the final 30 minutes of the day. First position out of the money at open on an FOMC day will likely be between $14.00 and $18.00. Fast forward to the end of the day and that same first place out of the money contract will now be between $.90 and $1.40. And they move *exactly the same.* If you wait until the end of the day on SPX 0DTE to buy and sell your contracts, you are getting 1st position contracts *on a huge clearance sale.* You just eliminated all high risk and maximized your profit. I see it happen nearly 3 times per week, every week where a $.60 put or call will run to $7.00 or even $21.00. Thats risking $70 and turning it into 2k in less than 10 minutes! You’re not going to win every play, but alas, when you do lose, you are only going to be out $20-$35 if you are only buying one contract at a time. An example that I watched for FOMC last week (5/1/24) happened right near the 1pm MST peak. The SPX 5050P at the 1:20 MST candle on the 5min chart was $.40. And, it was EIGHTEEN places out from the money line. Thats how juiced those contracts are on FOMC days. That same contract ran to $31.10 during power hour!! Did I buy it? Nope. Why??? Because of theta burn. Especially on a high volatility day like FOMC, that 18th place should have never been expected to profit because it was *so far out of the money.* At the high of the 1:20 5 minute SPX candle ($5084.61), SPX had to drop $34.61 in 40 minutes just to be in the money. That very rarely happens, even on FOMC days. But it did on 5/1/24. Not only that, it dropped an additional $22 in price after going into the money thus the huge amount of profit that came from buying 18 places out. Now just imagine what buying 1st position (closest put out of the money) would have returned on that particular day?? And in comparison, SPY only moved downside $7.01 for that same huge move.
Now yeah, that’s a fluke that doesn’t happen every day. But it does happen at least 3x’s per week on SPX options within the final hour of every day (not a $7 drop but instead a huge move in contract profits just like 5/1/24). And by waiting until then to make your moves, you not only minimize your risk, you also *maximize* the fuck out of your potential. I hope this helps you and anybody else trading 0DTE SPX options.