Overnight Lotto - short term Equity Options trading

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I call them overnight lottery tickets because they are bought a close, and sold at open the next day. For anyone with less than 25k in their fun account, trading overnight is a workaround to the pattern day trader rules.

For picks, I filter the stock universe down to the tickers trending on social media today. There are many tools and websites for this, and a free helpful site is https://marketstream.io/latest

Then look at the daily and 5 min chart to predict if the stock will gap up overnight.

5/3/21 Tonight's tickets are:
  • OCGN 15c 5/21
  • NOK 5c 5/7
upload_2021-5-3_14-46-7.png

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IMO ....... Best to buy the weeklies for maximum bang-for-your-buck when trading these 1-day option trades.

And don't forget about the SPY Monday & Wednesday options and the QQQ's Wednesday options.
 
Overnight said:
So...Did they work?
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I don't know of there's ever a good day to start gambling, but it certainly wasn't Monday afternoon. Both sold at open for 50% loss.

I didn't have spare time yesterday to post an update, but I do plan on continuing posting updates everyday, as I have traded this strategy for years personally.

Yesterday's new picks were ATM 5/7s on CLF and X. Will update with performance soon.
 
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ffs1001 said:
And therein lies the key......

If one could accurately predict the overnight gaps with consistency, then they would have the holy grail itself.
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Everything is a probability and profitability is measured over a longer time frame. The key is proper bet sizing so as to not blow up over a series of losing bets.

i don't follow these by the letter, but theories like Risk of Ruin are helpful.

From that point of view, it is not too different from intraday futures trading. The per trade maximum loss is defined.
 
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