When does a 0 dte SPX stop trading?

[ondafringe]

Okay, I need to finish this off in order to put the pieces together in my head.

So I restructured the trade idea: Changed it from an undefined-risk short strangle to a defined-risk IC. Still used the same short strikes as the strangle, but added a long strike 25 points out from either side of the short strikes. Premium collected was reduced to $190.

That's twenty five points of defined risk should an unexpected price shock occur that sends price blowing past either short strike. That's still a lot of risk; however, I would still use a $100 stop-loss on the trade. So (190 + 100) / 100 = 2.9 points. So three points past either short strike = stopped out.

And now that I know things can get crazy at the close (I knew that already, why didn't I think of it?), it would seem prudent to buy the IC back about five or so minutes before the RTH close for a few cents in order to avoid the risk of a price shock occurring at the close.

Okay, I think I can let this go now. lol

 

[BlueWaterSailor]

Okay, I think I can let this go now. lol

Just to keep you hooked in a little longer...

Tammy Chambless did a bunch of backtesting on SPX spreads, ICs, and IFs for 0DTE, and has a lot of experience with them (and therefore, a number of practical tips for working with them.) Here's a rather nice prezzo of hers on the topic - there are others around if you search for them as well.

 

[ondafringe]

Just to keep you hooked in a little longer...

Tammy Chambless did a bunch of backtesting on SPX spreads, ICs, and IFs for 0DTE, and has a lot of experience with them (and therefore, a number of practical tips for working with them.) Here's a rather nice prezzo of hers on the topic - there are others around if you search for them as well.

Thank you. Appreciate it!

 

[ondafringe]

Just to keep you hooked in a little longer...

Tammy Chambless did a bunch of backtesting on SPX spreads, ICs, and IFs for 0DTE, and has a lot of experience with them (and therefore, a number of practical tips for working with them.) Here's a rather nice prezzo of hers on the topic - there are others around if you search for them as well.

That slide show was pretty interesting. In fact, it made me feel pretty good because, after restructuring my trade as an IC, my trade setup was pretty close to her trade setup. She set her stops different and her spread width was bigger, so I'll take a closer look at that, as well as a few other things she mentioned. Thanks, again.

 

[klattermusen]

Hey, OP... did you see that warning from @BlueWaterSailor?

He is one of a number of options traders around here who really know their stuff. So if you intend to continue selling naked SPX 0DTE options, you might want to give his advice/warning some serious consideration.

Oh yes; I consider it dumb luck I didn't get shredded on this. And if it wasn't for some good people on this thread I would not have covered during the curb session.

Gratis.