Day trading $SPX vertical call spreads with 0DTE
- Thread starter BMK
- Start date
So your call spread bit the dust and you lost $700 and change? Am I reading that right?
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No. Both spreads were credit spreads, and both expired worthless.
Net profit of 290.56 on two contracts in each spread.
The two transactions at the bottom are not part of the iron condor. That was a call spread from Friday 03/17 that expired worthless with a settlement date of 03/20.
When I put the call spread on, at about 10:00 AM, SPX was at about 3933. When I put the put spread on, about four minutes later, it was at about 3940.
It would be nice if you'd be willing to share some screenshots of your trades on the chart, along with the setups, entries, exits.
I continue to dig into this, again, out of pure curiosity/fascination, and from what you've provided, it looks like you traded about 35 points or so OTM, with the delta on your 3900 short put around 20, and around 16 on your 3975 short call, with IV in the vicinity of 20. And at 1000, looks like the +/- 1SD price was around 3966/3897.
So, in general, your PCS had an 80% chance of expiring OTM, and your CCS had an 84% chance of expiring OTM.
I've never really thought about ICs being a better trade than just one CS, and one of the other comments thinks an IC is one of the worst trades. However, I seem to recall reading that the risk:reward on a CS should be no worse than 3:1, which, on your 5-wide, would require more than doubling the net premium you collected had you only traded one side, and that would mean trading closer to ATM than might be comfortable, especially with diminished odds of success.
From my limited options knowledge/experience, it would seem logical to assume that an IC would solve the 3:1 risk:reward recommendation, or at least come close, as you did, while still keeping your odds of success high, and since only one side could lose, it would keep the overall risk the same.
I'm bound to be missing something, but just thinking out loud. lol