0DTE-SPX Options vs. ES, MES

[antares66]

Hello,
is someone regular trading 0DTE-SPX options long (call or put)?
Mostly ODTE SPX options are mentioned in terms of selling vertical spreads.
But that´s not what i mean. I mean trading them instead of index futures (only long).
When your are right with your positioning you are making big profits because of gamma, volatility and delta. But the spreads are wider than the spreads on futures and i noticed that if you are wrong you are facing a huge loss immediately. I think that you can better manage your positions on futures (stop loss). But in case of huge market movements you benefit more from ODTE options than from one ES contract alone.
Would like to know your opinion about that because i haven´t found much of this strategy in forums or the internet in general.

 

[Overnight]

Hello,
is someone regular trading 0DTE-SPX options long (call or put)?
Mostly ODTE SPX options are mentioned in terms of selling vertical spreads.
But that´s not what i mean. I mean trading them instead of index futures (only long).
When your are right with your positioning you are making big profits because of gamma, volatility and delta. But the spreads are wider than the spreads on futures and i noticed that if you are wrong you are facing a huge loss immediately. I think that you can better manage your positions on futures (stop loss). But in case of huge market movements you benefit more from ODTE options than from one ES contract alone.
Would like to know your opinion about that because i haven´t found much of this strategy in forums or the internet in general.

You may have another choice soon, thanks to FOPs!

https://www.elitetrader.com/et/thre...e-cme-arent-these-just-binary-options.369156/

 

[MacBookProHo]

Would like to know your opinion about that because i haven´t found much of this strategy in forums or the internet in general.

Options are a double-edged sword...,if you are right on direction, you can make nice money, but you can certainly lose money quickly, as well, if you chose the wrong direction and held on to it.

The reason you generally haven't heard of people doing this is because not many people can do it successfully. And everyone writes it off as gambling. The safer, and boring, options strategies of selling them for premium is rather slow, boring and not sexy to write about.

If you know a car accident will happen, or a plane will crash into a tower, or a house will burn down, or someone will get cancer....it pays to bet on that incident, and win. But if you don't know any of those things, or don't think they will happen, then it's wise to sell insurance and collect your 'free' money premium.

You've been registered here since 2004....and you're asking this type of basic question just now? I would assume you would be a profitable expert in the market by now,

 

[BlueWaterSailor]

Hello,
is someone regular trading 0DTE-SPX options long (call or put)?
Mostly ODTE SPX options are mentioned in terms of selling vertical spreads.
But that´s not what i mean. I mean trading them instead of index futures (only long).

I don't do it myself, but I used to know a guy who bought options on 0DTE SPX (SPXW.X, to be exact.) I don't think his purpose was to "replace" futures trading, but I do know he was quite comfortable trading this instrument because he was very familiar with it.

When your are right with your positioning you are making big profits because of gamma, volatility and delta. But the spreads are wider than the spreads on futures and i noticed that if you are wrong you are facing a huge loss immediately. I think that you can better manage your positions on futures (stop loss). But in case of huge market movements you benefit more from ODTE options than from one ES contract alone.

I'm not sure how you're "facing a huge loss immediately" in any way that you wouldn't with futures. Assuming you're not starting out at 100 delta, your losses will be proportionally less than those in the underlying contract until your strike is at 100D - at which point, your losses will be the same, dollar for dollar. And yes, you can use stops on your options positions - 0DTE is one of the few situations where it makes sense to do so.

The question is, what are you trying to achieve? If you find futures more congenial, then trade those. If you're looking for some benefit from trading SPX that you're not seeing in futures, you should try to explain what it might be.

 

[ETJ]

The SPX can, for most users considered as being superior as they always settle cash, the futures options don't in none aligned months. Just make certain you are out the day before SET. Unless you like, leaving your destiny to luck or simply good at overnight risk! Or avoid nonaligned settlement.

Plus the SPX has Flex availability and there are a handful of other differences, but those will very rarely be an issue in 0DTE. Just nice to have them in a very, very rare circumstance when you could use them.

 

[BlueWaterSailor]

Just make certain you are out the day before SET. Unless you like, leaving your destiny to luck or simply good at overnight risk! Or avoid nonaligned settlement.

That's the utility of SPXW.X - always cash-settled in the P.M. No SET to wait for.

 

[ETJ]

"That's the utility of SPXW.X - always cash-settled in the P.M. No SET to wait for. " Excellent point, but still the monkey of carpet bombing. You just need to be careful

 

[BlueWaterSailor]

Excellent point, but still the monkey of carpet bombing.

Let me see... delta, gamma, theta, vega, rho, vanna, volga, vera, charm, color, speed, zomma, DvegaDtime, DdeltaDvol, DvegaDspot, convexity... NOPE, not coming up with "the monkey of carpet bombing." Is that yet another seventh-order partial derivative greek or something?

 

[ETJ]

Not a Greek - a marking technique. Google it.

 

[Overnight]

Let me see... delta, gamma, theta, vega, rho, vanna, volga, vera, charm, color, speed, zomma, DvegaDtime, DdeltaDvol, DvegaDspot, convexity...

You post something like that, and think you are going to attract me to vertical spreads? You are truly nutzo, like all options traders. WTF was that diatribe, lol!