I had 3 SPX put credit spread for 5295/5290. Towards the very end the SPX price was roaming very near and went ITM a coup for times. I panicked and closed the position take a loss around 400$. I should have stopped here but for some reason I thought let me open a call credit spread on 5300/5305. I did very wrong here at the last 10 mins SPX went was pass 5305. I lost like 1000$ just today feel like shit. How can I avoid this? I feel like I should stop doing 0DTE at least during the closing hours. This wiped out all my profits till now:(
Edit: Thanks you all for the reply. It really helps a lot. It's easy to get lost and loose money if you don't have the right guidance.
Posted by Mr_Arrow1
17 Comments
0dte is like buying a car for 400 dollars after infinite numbers of owners. It’s possible to get s great deal if you are a mechanic. For normal people, “buy VOO and don’t anything” is a better option.
Try to close positions at 50% profit, don’t open positions in the last hour of trading, and don’t try switching sides on 0 DTE so close to the current trading price. The premiums in the last hour of trading are not worth the risk at all.
I’ve done that before it made me not even trade SPX anymore.
stop selling 0dte credit spreads, thats not a valid way to play credit spreads. youre not collecting theta on any 0 dtes, and youll always run into trouble from volatility expansion. youre better off just going long on puts or calls.
Yea I feel ya. I got lucky. Stopped a burtterfly for a small loss when the FOMC notes dropped. Could have taken profit at 1:30. Oh well. I then opened a 5305/5310 C spread. Got $1.00 and walked away then came back and found it getting tested. Opened a 5305/5300 P spread to make an iron butterfly for $2.45. No sooner did the order fill, SPX pulled back to 5295. Max loss $1.55. Recovered and closed at 5307 and I ended in the green by $1.44 but, holy fuck, what a ride. If I want that, I’ll just head over to Foxwoods and play Black Jack for an hour. Think I’m going to take tomorrow off from the SPX and think about self disipline.
You should stop doing what you’re doing immediately. Put your money into an index fund and let it earn something while you learn about trading, if you actually want to trade.
Get the book Trading in the Zone by Douglas as this addresses the physiological side of trading.
Trading is running a business and there will be ups and downs, but we need to let mistakes (like we’ve all made) go quickly to get back to running our business. Learn from this to hopefully not make the same mistake again.
I’ll agree with another post that you have no business trading 0dte/day trading if you do not have at least a $25K+ account. The fact that this prevents you from good sound trade and risk management should be enough for you to trade in a more conservative way and likely have much higher profits.
Just stop gambling.
Check out Menthor Q for free gamma levels on SPX. I saw the price close to 5290 at around an hour before close and the levels provided suggested support at 5287. I sold 5x 5285/5265 Bull Put for 3.85 each.
Also check out OptionRecom.
Fun fact. If you’re making a post titled: “Did I make a stupid mistake today” you already have your answer.
If you’re set on credit spreads start at more conservative strikes at dates further out. It allows you to be wrong and often still win. You can get more aggressive as you get experience under your belt.
Yes you did
Despite people’s (sometimes justified) hatred for 0DTE’s, I think the biggest mistake you made here is trading leading up to a major market leader’s earnings such as NVDA. I would focus on identifying quieter days/weeks in the market for a strategy such as that. You also happened to do this on a Fed day, which always makes the S&P react violently intraday. Just a very bad day overall to attempt something like that IMO
Did the same dude, panicked, and lost 3k in 2 days !! At the end I would of won if I held!!
A credit spreads that goes ITM should be good for you. I’m confused
At least in Vegas you get free drinks.
Live and learn. I best just about everyone who does options has done the same thing. I have up on spx and 0DTE trades. I moved over to long credit spreads on a more stable stock with a week difference between dates. Gives me more time to adjust for changes in stock prices. Might not be as profitable but more stable in my opinion.
I wish you the best of luck and don’t get down on yourself. Take a few minutes go do something you really like or just sit outside or heck go smell a rose, reset yourself and be one with the world again. And then get back in their and fight