0dte

[BlueWaterSailor]

I hear wedding bells. Send me an invitation.The party should be a blast.

I assure you, you have no reason for that burning jealousy - I promise, I wasn't trying to edge you out! Please: just put down the cheap booze and the sleeping pills, and get help. Life is still worth living, even if this, er, object of your ardent desire didn't respond to you.

P.S. That shrill snippiness of yours carries certain implications with it... did you run out of Kleenex and lube, or did the fleshlight stop working? We'd hate to lose you for such trivial reasons.

 

[zdreg]

I assure you, you have no reason for that burning jealousy - I promise, I wasn't trying to edge you out! Please: just put down the cheap booze and the sleeping pills, and get help. Life is still worth living, even if this, er, object of your ardent desire didn't respond to you.

P.S. That shrill snippiness of yours carries certain implications with it... did you run out of Kleenex and lube, or did the fleshlight stop working? We'd hate to lose you for such trivial reasons.

Time will tell. The two of you are kin. You make a great team permeating your posts with ,,,,,,.

 

[Gambit]

It's risk-defined and 0DTE; basically a "make 1 or lose 2" binary outcome with a reasonably high chance of winning. No greeks to worry about... just hold and hope that the market was right about pricing %ITM/%OTM.

From my experience with these, it's best to exit them at least a couple of minutes before expiration. You'll have 90%+ of your credit, and you'll avoid what I call "the crazy 90 seconds" at the end, when Things Happen(tm).

P.S. One exception: some people like to sell 0DTE low-delta options - lots of them, 10s or even 100s of contracts. A friend of mine did that for years, and did well with it (notably: in a less volatile market than this.) But his big trick was having stops on either side, relatively close to and inside the short strikes; as I recall, he was looking to minimize the loss to something like 5:1 or 7:1, in the rare cases that he got hit. Different folks, different strokes...

Thanks for posting this. This is a huge retail strategy and has been profitable for a while. Check out the Tastytrade trade Facebook group for more. Stops are key and there is more to it. Lots of volume and institutional participation now. Fills are usually not a problem.

 

[qlai]

Stops are key and there is more to it.

He is saying that it is binary- no stops. What stops would make sense here? I would assume win rate would drop below 50% (it’s already low based on the article) and the premium capture they quote is 4-8% of a pretty small value to begin with (tree to four legs commission not included) Sounds more like - let us churn your account to death strategy publishes by a biased source. Could you link a good article/video on this topic from Tastytrade?

 

[BlueWaterSailor]

Time will tell.

Nah, just basic troubleshooting ability. For your fleshlight, it's most likely the batteries. For your Kleenex box and Vaseline, it's the empty state that should be a clue.

Indulge me if you will... what is it about unarmed morons who just can't resist trying to enter a battle of wits? Is it just masochism on your part plus a lack of courage to find someone local dressed in black latex and wielding a whip and a dildo? I mean, I get the continuation - once I've stepped on your pitiful little ego, you just can't resist knee-jerking and piping up - but what's the initial impetus? Is it some mental disease that you all share? I'd be willing to write it up for the next version of the DSM. Don't worry, I'll just refer to you as "worthless slave" - that should add to the burn nicely.

 

[M.W.]

Popcorn time, the two number one alpha bullies in ET are battling it out...pure comedy.

 

[BlueWaterSailor]

Thanks for posting this. This is a huge retail strategy and has been profitable for a while.

Sometimes, it can be. In this volatile, spiky environment - see @cesfx's experience - the results are likely to be quite a bit worse than usual (which is why I haven't done it in a year or more.)

There's a lot of this kind of thing that goes on among traders, and I see it here. Some strategy (e.g., the wheel) that is profitable in a rising market gets used by a bunch of people, and eventually the news makes it out to the general public - who jumps on it gleefully. But by that point, the market has turned and it doesn't work anymore, so Joe Average Trader gets rekt.

Meanwhile, people who actually take rational, well-considered risks and pay attention to what's going on are working on other, more market-appropriate strategies - and eventually wrestle one to the ground and start making money with it. Eventually, news of that makes it out to the general public... lather, rinse, repeat.

I would strongly suggest not being on the losing side of that cycle and learning to work with what the market is offering now. That, of course, requires much more effort and thought than copying what the Facebook, Twitter, etc. crowd is hyping right now...

 

[BlueWaterSailor]

Popcorn time, the two number one alpha bullies in ET are battling it out...pure comedy.

Speaking of masochistic morons - I just knew that would bring you out of whatever hole you've been hiding in. You do tend to run in packs, don't you?

 

[cesfx]

forget the 0dte... I am looking at 4 months now

 

[BlueWaterSailor]

He is saying that it is binary- no stops.

Actually, no. I may not have been as clear as I thought I was, so let me try again.

For most option trades, stops don't make sense - they knock out all possibility of mean reversion in vol and/or price; certainly for risk-def strategies or anything where the max loss is consistent with your risk scenarios. But: for high-leverage/low-delta trades, where your %win is extremely high as are your max losses if you do get hit - e.g., 1000 0DTE SPXW.X narrow spreads with the short at, say, 5D - stops are an absolute, critical necessity. The size of the loss, rare as it is, is completely unacceptable.

If you make 0.10 per lot on $5-wide spreads at a 98% win rate, 1k lots gives you $10k every time - except for the ~1:50 loss where you blow out $490k in one shot. But getting stopped out at a $30k-$50k loss - well, that doesn't sound too bad by comparison, does it? Especially if you have, say, 20 wins beforehand to cushion it.

(Note: I am not recommending that anyone do this. The guy I knew who was doing it had lots of years of experience, and I can tell you from my trading that there are a lot of extra wrinkles to it; more than is visible from a shallow description like this. In fact, any time you see something like "easy returns" in trading, you should be suspicious as hell - and poke at it gingerly with a very long stick.)