ODTE options .... pros/cons?

BKR88 said:
The discussion was regarding "no time value" in 0DTE. They definitely DO have time value. The exact amount isn't being discussed. I was just using these since they're as close to 0DTE as possible.
More...
When are these bad boys first posted where a rabid punter can get their account 'involved'?
Same day at 8:00 AM? 9:30 AM? 23 hours prior?
delete.jpg
 
easymon1 said:
We know that they are not the same thing in reality but are "0 time value and is expiring soon" viewed equally in terms of BlackSch?
More...

I tried to make a correction but I exceeded the 60-minute limit. What I meant to say is "I assume they mean extremely high theta because the option is expiring soon..." The article is very confusing with this "0 time value" term. I really don't know what they mean by that.
 
R1234 said:
I've been googling on 0DTE. Basically they're about trading the SPX and XSP (mini) options on the CBOE. Just trade it on the day of expiration. They european style so no worries about exercise.

I found this video about a lady doing 0DTE iron condors using index options (I found it fascinating):
0 DTE SPX MEIC Strategy - January 16, 2023 by Tammy Chambless - YouTube

I've been doing it in the form of Event Contracts for several months now and there is a lottery-like feeling to it. For example if you watch it as it approaches expiration, something can move from 25 cents to $20 dollars in very short time.
More...

She notices she's getting stopped out of her credit spread due to larger intro-day moves so she proceeds to do credit spreads on intro-day. LOL
 
Last edited:
Matt_ORATS said:
I was just interviewed by a magazine about this and here were my points:
  • These options are not going to cause volmageddon: The market maker counter parties can adjust prices to manage risk. These options are not like the contracts that caused problems.
  • It is not gambling any more than other options. We have customers doing serious research using our intraday data. Eventually, we will have hour by hour expirations and that will be a good thing. What is beneficial about options is the price and risk discovery they provide. Intraday announcements can be priced and hedged.
More...

Exactly! The timing of the trading is just being displaced to same-day vs. over two days, over a week or a month and etc. Regardless how often or when options are traded, MM's will always want to hedge.
 
You think they can handle the settlement of hourly options?

there’s no official spx print every hour

Matt_ORATS said:
I was just interviewed by a magazine about this and here were my points:
  • These options are not going to cause volmageddon: The market maker counter parties can adjust prices to manage risk. These options are not like the contracts that caused problems.
  • It is not gambling any more than other options. We have customers doing serious research using our intraday data. Eventually, we will have hour by hour expirations and that will be a good thing. What is beneficial about options is the price and risk discovery they provide. Intraday announcements can be priced and hedged.
More...
 
Next she will be talking about infinite gamma.

taowave said:
You and several others should read a basic primer/book on options..

It doesn't appear that most of the posters understand intrinsic vs extrinsic value..

You in particular are a bit confused with DTE and time value
More...
 
[QUOTE="Overnight, post: 5774020, member: 494466"

Aren't 0DTE options initiated at the start of the trading day, and expire that day? [/QUOTE]

Not necessarily. When I do them, I'm in and out 2 to 4 times a day. Just treat it like normal option day trading. If you decide to do the popular credit spreads, and if the market swings in the opposite direction, you can lose your money very very fast as the risk reward is very bad. There's more to life than just credit spreads
 
You must log in or register to reply here.
Back
Top