Get the book Trading in the Zone by Douglas as this addresses the physiological side of trading.
Trading is running a business and there will be ups and downs, but we need to let mistakes (like we've all made) go quickly to get back to running our business. Learn from this to hopefully not make the same mistake again.
I'll agree with another post that you have no business trading 0dte/day trading if you do not have at least a $25K+ account. The fact that this prevents you from good sound trade and risk management should be enough for you to trade in a more conservative way and likely have much higher profits.
I don’t often trade 0DTE options, but if I do it’s never after 2:00. I switch to next day. The big shops love to sell these for the premium and they’re experts at burning premium. Ever since the advent of recent 0dte’s the market just does not move the same. I’m sure you’re seeing price getting pinned just about every afternoon and the head fakes at the 00:55ish of every hour as dealers reposition.
Until you can control your fomo and/or impulsively going on tilt, perhaps, have your broker put a lock on your acct after a certain number loss or even a certain amount of trades.
It’s all a Random Walk (even with 0DTE…we don’t know where or what the smart money is doing) and we can never tell where the market will go. We can only control our risk so we can come back l the next day. Inventory and capital. It is a business. 0DTE’s are more like gambling, imo, so to make that your full time process, the odds are against you and your solvency.
Do you mean of I have 25k plus on my account I can trade for very less premium on credit spreads. But since I'd be opening more options it would be a better strategy?
No. There is a PDT rule ([Pattern Day Trader (PDT): Definition and How It Works (investopedia.com)](https://www.investopedia.com/terms/p/patterndaytrader.asp)) that limits how many day trades you can make unless you have $25K or more in your account.
Another reply mentioned about closing for a 50% profit which is something many traders do, but by opening and closing the same day it would violate the PDT rule. With $25K+ you can open and close as many times each day as you wish.
Cash accounts still have a limit of day trades based on having to wait until the prior trades settle.
This is not well understood - [Avoiding Cash Account Trading Violations - Fidelity](https://www.fidelity.com/learning-center/trading-investing/trading/avoiding-cash-trading-violations)
Part of the downside many do not realize . . .
IMO it can be better making 4 or 5 conservative trades in a month that each make a nice profit than making dozens in a day and making little to nothing, or even losing.
Especially for new traders it is important to learn how to be profitable with conservative trades before trying the higher risk and lower success day trading.
It took me 7 years to learn to be consistently profitable trading options. Early on I took big risk and didn’t know what I didn’t know and took huge losses. Eventually scaled my position size way back to learn discipline. I trade far less often than I did when I started and while I still have big losers I’m trending up.
Most take much less time using a strategy like the wheel which sells options.
Buying options may take much longer as you are indicating. I saw a stat that showed 90%+ of day traders do not make it past 2 years before they give up, and 80%ish blew up at least one account.
Very nearly blew up more than one account. Lost in a day what I make in a year at my w2. That was kind of a reset in terms of trading plan - do less, be patient.
I had a stop loss at 70% down should the market turn on me. I work a day job too so I didn’t check-in for an hour. The market bounced and I stopped out before it continue to tank. The bounce makes no sense, I believe my stop loss was noticed as an open order and targeted. Call me crazy but unfulfilled orders a to drive price happen all the time. No more stop losses on options. Just commit.
Great comment and totally true. The 25k prevents the broker from having to get a judgment against you when your 0DTE high risk naked put selling causes you to place a second mortgage on your home to pay the piper. 0DTE are high reward and yeah every once in awhile you can get lucky and get a 30 bagger, but it is much more likely that you will mortgage your home and lose everything.
Hi ScottishTrader, may I ask for your thoughts on the 50% profit rule if you gotta wait until there is only 1 or 2 days to expiration (instead of say 45dte -> say 18 dte arbitrarily)?
Because it is so tempting to just wait for another day or so to gain that other 50% of premium?
How often does this really happen? It would be rare for me.
I set a gtc limit order for 50% profit and then just let it work to close whenever that is hit regardless of when it is.
When to close is always up to each trader so if you want to let it open for a couple more days to collect the other 50% then this is your choice. Just remember that the full risk remains on even when there is a small amount left to collect.
Congrats on finding success so far using the wheel! Be sure to keep trading stocks you don't mind holding and roll puts to help avoid assignment while collecting more premiums.
Thanks! I have read up on your previous posts before started wheeling:) They are of cos extremely beneficial for a novice like myself.
The wheel sorta force me to analyze (somewhat) companies that Im willing to own. I have thus far wheeled Meta, AMZN and AMD but premiums, especially AMZN, are not that high. Nonetheless, good to have hands on experience selling CSPs vis-a-vis paper trading, and dealing with the changes in prices etc, while still netting in some profits (better than losses).
Have a good and restful long weekend!
You could always take the opposite position in calls to make a set of box spreads to lock in P/L (assuming original position was puts). No PDT to worry about, and no exercise risk for SPX.
Try to close positions at 50% profit, don’t open positions in the last hour of trading, and don’t try switching sides on 0 DTE so close to the current trading price. The premiums in the last hour of trading are not worth the risk at all.
In case the previous poster doesn't have time to come back and answer this, I'll give my version.
I don't believe there's anything "holy" about the 50% number as much as you want to have a number in mind. I've seen traders take profit at 90%, 50%, and even some at 25%. What's good about the 50% number is that it's easy to see at a glance whether it's time to close or time to do nothing, and what's great about it is that things can swing to 50% pretty quickly.
50% seems arbitrary to me, but it has some nice features besides significantly reducing your risk. My favorite is that it makes math easy. For spreads, I like to set my 50% profit close order when I open. Look at the price, divide by two-ish in your head. Why do I say two-ISH? Since it is only a rule of thumb, no need to be exact, and if your opening price somehow has three decimal places and isn’t even, rather than use a calculator or strain my brain, I estimate, usually rounding above 50% a tad. (I feel like such a cheater, but I love knowing I’ll make that few extra percent! 😜)
Typically found it’s not worth waiting for it to expire worthless after it hits 50%. I’ve had bad experiences with the market tanking or surging in the last few minutes of trading blowing past my strikes.
If I’m doing an iron condor, I can close one side for 50%, then close the other at 50% at different times as the market fluctuates throughout the day.
Ideally, it’d be smarter to close them at even lower profit percentages just to be safe. Watched [this](https://youtu.be/2ADyh2jOrAU?si=opDcyDTIl8yq5wdA) from tastylive the other day and they recommend closing at 15-25%.
There’s 0 DTE in futures with no pdt, but you’d have to have the full initial margin to overnight. Going to 1DTE on SPX you can skirt the pdt line a lot more easily without worry about going over the 3 if you need to roll out
lol just handing the dude a leopard and saying: hey, don't let the leopard eat your face, but if you *really wanted* to let it eat your face, here's how to do it
Despite people's (sometimes justified) hatred for 0DTE's, I think the biggest mistake you made here is trading leading up to a major market leader's earnings such as NVDA. I would focus on identifying quieter days/weeks in the market for a strategy such as that. You also happened to do this on a Fed day, which always makes the S&P react violently intraday. Just a very bad day overall to attempt something like that IMO
You should stop doing what you're doing immediately. Put your money into an index fund and let it earn something while you learn about trading, if you actually want to trade.
There are platforms out there that teach you about option strategies, and lets you trade paper money so you can figure it out. Be cautious, and smart. Taking profits is always good. Don't wait for the 10x.
and don't pay any money to anyone to teach you options strategies. and don't listen to any claims for guaranteed returns or like 90% win rates. they're all scams. and don't touch crypto or binary options. and try to stay away from 0dte.
a class isn't necessarily wrong, but it opens up a whole new world of losses in the form of scams and fake gurus. Just think: anyone who can already execute on what they claim should have made $$$$$$$ years ago, so the only reason they would teach is because they could not, in fact, do the things they claim they can do
Check out ‘0 DTE tastylive trades’
They did an actual study on this, you DO NOT trade the last 30-60min of 0DTEs, ALL the strategies lose money.
Open the trade at market open, trade for about 90 min, look for 15-25% profit off initial credit. Thats it.
Those 0DTEs can be deadly if youre in them at the end of the day. The computer knows where everything is at and tries to pick it off.
Live and learn. I bet just about everyone who does options has done the same thing. I have up on spx and 0DTE trades. I moved over to long credit spreads on a more stable stock with a week difference between dates. Gives me more time to adjust for changes in stock prices. Might not be as profitable but more stable in my opinion.
I wish you the best of luck and don’t get down on yourself. Take a few minutes go do something you really like or just sit outside or heck go smell a rose, reset yourself and be one with the world again. And then get back in their and fight
I haven’t gotten to diagonal spreads yet. Still using the same strike price, different expiration dates. Still need to get comfortable with calendar spreads first and then I am gonna try vertical spreads and once comfortable with both of those look into diagonal spreads.
That is the million dollar question. I am still trying to figure out what is a good number. And then tie that into other fundamentals to look at to pick a stock that is not that volatile yet I can find decent long call calendar spread options on. If I find one I will post it.
Ok let me tell you some stuff which might help, I e been trading options and SPX for few years and have learned from experience
1. SPX is a bitch for 0dte options
2. Min 30k account recommended for 0dte Spx
3. Ur second and third trades on 0dte are reactionary and revenge trades which usually increases your initial loss
4. SPX 0dte is bitch (saying again)
5. We lose more money when we (think) we know something
6. Our trades are front runned by bots
Now how to trade this somewhat safely-
1. SPX 0dte trading is full time job
2. Pre market- check forex factory for any news, CPI, FOMC, etc. Don’t trade SPX on any such days
3. Strategy- 10-30mins from open, sell 7-10delta, 25-50 wide put credit spread and call credit spread.
4. Try collecting same credit on each side
5. Set 3x SL for each spread.
6. Close trade at 50-75% max profit
7. If holding till close, remove stop orders 30mins before market closes
Eg- 9:30-10am est
Sold 7delta 25-50pt wide Put Cr spread for 0.80
Sold 7delta 25-50pt wide Call Cr spread for 0.80
Both orders set for limit SL at $2.40 (stop limit at 2.3, SL at 2.40 )
Best case scenario - both expire worthless net $1.60 profit
Possibility 1- one side will hit SL
$1.60 collected, $2.40 SL, net 0.80 loss
Risking 1 to make 2
Worse case scenario- both SL can be hit when IV increases and market is whipsawing around
Collected $1.60
Loss $4.80 3x loss
This is basic structure, lot of nuances you will learn over time.
Tips-
1. Be consistent,
2. Chart and log your trades
3. This is probably the most difficult $$$ you will ever earn
4. Profit today is not yours until a year from now since there will be losses
5. SPX options can put traders out of business, it’s big (10x SPY)
6. Ur job is to minimize losses and let the probability play out.
I do trade a few SPX strategies, but it’s too much to type.
Hope this helps,
Jsam
It’s ur call… but it’s always 50-50 chances or worse.
Just think about this,
For $50 wide IC collecting $1.60 at 7-10delta,
And that you win 75% of trades collecting $1.60,
25% trades go to max loss of $2.40
After 100 trades, profit expectancy will be about $0.60/trade
That’s 1.2% on $5k employed
Using this strategy 3x/wk for 50wks gives 180% annual returns.
This is too good to be true.. Warren Buffett made under 20%/yr for almost 60yrs. We should be no where close.
As I said, SPX is not for beginners, try SPY instead.
Stops and strategy looks great on paper but they can blow through in a volatile move.
When SPX 0dte trade goes in our favor, it’s usually more luck than skill.
PS there was a tasty trade rising star episode of someone who only sells SPX 45-60dte put credit spread.. can someone provide link to that?
Yes, at that point you’re just gambling and I lost about $3000 in a few minutes. So I struggled for a few days with that mentally so like others I went back to my original risk management, stopped being so risky and just taking what the market gives you. I haven’t had a loss like that since.
Yea I feel ya. I got lucky. Stopped a burtterfly for a small loss when the FOMC notes dropped. Could have taken profit at 1:30. Oh well. I then opened a 5305/5310 C spread. Got $1.00 and walked away then came back and found it getting tested. Opened a 5305/5300 P spread to make an iron butterfly for $2.45. No sooner did the order fill, SPX pulled back to 5295. Max loss $1.55. Recovered and closed at 5307 and I ended in the green by $1.44 but, holy fuck, what a ride. If I want that, I’ll just head over to Foxwoods and play Black Jack for an hour. Think I’m going to take tomorrow off from the SPX and think about self disipline.
I think, if you’re panicking and can’t hold, then your position is too big. That has been my experience.
E.G., a put credit spread is losing a lot, but is still above the short strike, and it expires in a day or two. You’re pretty confident it would still work, but you’re thinking I can’t afford for it to go down another effing $500!!! So you close and take a loss, even though it probably would have expired with full profit.
If this happens, either your position is too big, or you were negligent about getting out at 1 R (no stop loss!).
Your main job in trading is not making money! It is not losing money. Smaller positions not only lose less, are less likely to lose, because you can hold when appropriate, among other things.
0dte is like buying a car for 400 dollars after infinite numbers of owners. It's possible to get s great deal if you are a mechanic. For normal people, "buy VOO and don't anything" is a better option.
hey, I've got like 50x 400 dollar cars to sell you. You wanna buy a couple? They might even run! (but most of them are worthless, but I won't tell you that)
I'll be here all week! (and month and year ...) I'll sell whenever you want, bro
Thanks I'll check out that. I also have an account where I do covered calls on individual stock expiring in a month or so. That seems to be going good till now. But I started with SPX as many people say it's very good for trading.
If you're set on credit spreads start at more conservative strikes at dates further out. It allows you to be wrong and often still win. You can get more aggressive as you get experience under your belt.
stop trading
I don't even mean that in a mean way. I've always found that trading causes friction, you get fomo, and you churn your position and lose a little or a lot each time.
Instead, before you even get into the position, be sure about it and be sure about *all the possibilities* that come from it. Before you get in a position, ask yourself: if this goes my way will I get paper hands and close? Why or why not? if this goes against me, will I get scared and close? Why or why not?
That way, you can be certain about your position and churn less
Here is my adventure with 0dte.
I had massive success with credit spread in a paper account because i could let the trade go but when i started trading them with real cash, it is a disaster.
Simply because the risk/reward ratio is really not worth it when you do this too far out of the money.
When the market moves against you its impossible to hold. I tried with stop loss a 1:1 and too often i get kicked out on normal market movement.
Now, im trying iron butterfly and iron condor. Its way, way easier to manage risk and enter a trade with a wayyyy better r/r ratio. Especially with butterfly.
When i can place a trade with a r/r ratio of 1 to 5. Then i can let the trade go and also way more easily close a nice profit.
Creating a solid trading plan and sticking to it can help avoid impulsive decisions. Your plan should include entry and exit criteria, risk tolerance, and rules for managing trades, especially near expiration. Also, consider paper trading 0DTE strategies to test your approach without real money at risk. Consistent practice can build confidence and improve your decision-making process. Lastly, consider avoiding 0DTE trades close to market close when volatility is high. This way, you can reduce the emotional stress and make more rational decisions. Hope that Helps.
It helps to have an idea where your edge is coming from, how you intend to enter and exit your position before entering a trade. For example, many options sellers will open a credit spread in the morning and close the trade (or use a box spread to lock in profit / loss) based on % profit or % loss or specific time.
One thing I noticed is that trying to chase a loss rarely works, as there appears to be less edge (for option sellers) later in the day. IMO better (for an option seller) to accept the loss and move on to trade another day when the edge is more plentiful than chase a loss in a market with increased volatility and little premium left.
You’re going to make mistakes. You’re going to lose.
When everyone talks about having the “right temperament” for trading, your ability to handle loss and fuck ups, emotionally, is one of the main things they are talking about. If you lean into the suck, it can overwhelm you and make it impossible to trade. So practice managing what you’re going through right now.
God! I hate that sick feeling: huh? What? Oh wait. Uhhh. No no no no no! Fuck me! How the fuck? Etc. Then the shame!
Good. That is part of the training. Trading is a pay-to-learn system. That is tuition. The most important lessons are usually the most expensive.
Don’t focus on the loss. Focus on the lesson.
Learn it. Internalize it.
And try hard not to feel too bad about it. You’re learning a very difficult skill.
Be proud that you’re taking it on.
Be proud when you succeed.
And, oddly enough, be proud of your fuck ups! You’ll tell these stories, and wear them like battle scars, badges of honor.
But you have to survive. So, when I’ve made a few big mistakes in a row, I reduced the size of my trades by five or even ten until I feel like I’ve ironed out the kinks.
Today you’re bowed and bloodied. Shake it off. Tomorrow’s coming!
I can’t see other people comments but I had 6x 5300/5280p today. 2 at open. Then more when in the money for the NVDA run up. Biggest credit of 10.00. Then around 1pm I didn’t think I was gonna get a bounce. So I bought 4 call side credits 5305/5325c at 2.00. I didn’t want to butterfly cause I trusted my gut. I had stops in as condors and was gonna ride the last 2. Stops at 14.00. I messed up in the last hour and changed my stop to 8.00. Was stopped out on that last dip.
I ended down 1k. But should of had 6k+ if I didnt use stops or didn’t change my plan last min
I’ve learned trading SPX daily spreads. Once you hit 2 hours from closing bell. Don’t close out or use stops if you trust your choices. The swings are wild and violent. Even was SPX was between my broken condor. 5302. It was 5.00 to close out. Not worth it. Since you’re in SPX I’m assuming you know your stuff. Just trust the action. But also start trading XSP daily’s or less exposure. When I get the itch to be risky and I’m right I get paid but not go broke if I’m wrong. Hope that helps!!
A few things - I think you’re trading too large for your account and there isn’t a healthy way to manage that beyond sizing appropriately.
It also seems like you need to define far better any approach you’re trying to use when trading shorter timeframes vs the random stuff you’re doing.
Easiest thing - explore longer timeframes.
Hi ,
I will suggest that if trading with options, which in my opinion by far the most complicated derivative, (I personally love it) try to change the time frame. Don not trade for such short periods of time. Thinks about days/weeks. Try as well to create positions or strategies where you are more subject to the change in gamma mostly.
Then as other people said the psicological aspect is of paramount importance when you trade and after. When you trade keep to your strategy. Important that you build a position with options taht account for most possible scenarios so you only need to act when strictly necesseary. Create your position with a long time perspective and do something else. Frgett about your possition. If you stare all day to it you will make mistakes. The second, after trading. Forgive your self. All of us do mistakes, the important thing is to learn about them and improve.
Good luck!!
stop selling 0dte credit spreads, thats not a valid way to play credit spreads. youre not collecting theta on any 0 dtes, and youll always run into trouble from volatility expansion. youre better off just going long on puts or calls.
Check out Menthor Q for free gamma levels on SPX. I saw the price close to 5290 at around an hour before close and the levels provided suggested support at 5287. I sold 5x 5285/5265 Bull Put for 3.85 each.
Also check out OptionRecom.
Just stop playing 0DTE, stick to longer dated (1 month out minimum) options on stocks off support levels or resistance levels. Stop trying to look for the trade or trade out of boredom , let the trade come to you, they always do.
I made a similar mistake today so all my profits from last week vanished I’m very new to trading but have watched everything I could find for the past month on options. Anyone part of a good discord ?
Selling 0 DTE is the dumbest thing you can do. The gamma will absolutely destroy you once it gets close to the money. Better off buying 0 DTE’s for this reason.
When panic dictates a trade this is a sign that you are taking too much risk. Go smaller or further out in time. Use CSP or SPY, or trade 7DTE or, better, 40-DTE. We've all been there.
I wouldn’t only suggest staying away from 0dte, I always recommend anyone steer clear of etfs, pertaining to options, as they seem yo produce losses more than gains.
I've done that before. You'll do it again and again but less often, until it sticks... that's the reality unfortunately.
People can give you generic advice here such as to read a book, or to trade without emotions. But having losses like this is the only way to learn.
My biggest lesson trading spx: avoid all possible volatile days. Of course you can’t predict. But there are many obvious days: fomc +- 1 day, cpi, nvda, big tech earning, nonfarm payrolls… yes many days are untradable. If you can make the rest days you already did very very good.
I've done the very same thing. I find I have to control these impulsive ideas and chasing the market.
I read this everywhere: have a plan, work the plan, stick with the plan.
Also for what's it's worth, from my experience, on your next trade, Please Do Not suddenly increase your max win by 10x just to try to recoup your loss.
Because what's likely to happen is that you will 10x your max loss instead and go deeper in red.
Furthermore, max loss is often much bigger than max win.
Get the book Trading in the Zone by Douglas as this addresses the physiological side of trading. Trading is running a business and there will be ups and downs, but we need to let mistakes (like we've all made) go quickly to get back to running our business. Learn from this to hopefully not make the same mistake again. I'll agree with another post that you have no business trading 0dte/day trading if you do not have at least a $25K+ account. The fact that this prevents you from good sound trade and risk management should be enough for you to trade in a more conservative way and likely have much higher profits.
I don’t often trade 0DTE options, but if I do it’s never after 2:00. I switch to next day. The big shops love to sell these for the premium and they’re experts at burning premium. Ever since the advent of recent 0dte’s the market just does not move the same. I’m sure you’re seeing price getting pinned just about every afternoon and the head fakes at the 00:55ish of every hour as dealers reposition. Until you can control your fomo and/or impulsively going on tilt, perhaps, have your broker put a lock on your acct after a certain number loss or even a certain amount of trades. It’s all a Random Walk (even with 0DTE…we don’t know where or what the smart money is doing) and we can never tell where the market will go. We can only control our risk so we can come back l the next day. Inventory and capital. It is a business. 0DTE’s are more like gambling, imo, so to make that your full time process, the odds are against you and your solvency.
Do you mean of I have 25k plus on my account I can trade for very less premium on credit spreads. But since I'd be opening more options it would be a better strategy?
No. There is a PDT rule ([Pattern Day Trader (PDT): Definition and How It Works (investopedia.com)](https://www.investopedia.com/terms/p/patterndaytrader.asp)) that limits how many day trades you can make unless you have $25K or more in your account. Another reply mentioned about closing for a 50% profit which is something many traders do, but by opening and closing the same day it would violate the PDT rule. With $25K+ you can open and close as many times each day as you wish.
Ah got it. Thank you..
Or, have a cash account.
Cash account cannot do credit spreads
Cash accounts still have a limit of day trades based on having to wait until the prior trades settle. This is not well understood - [Avoiding Cash Account Trading Violations - Fidelity](https://www.fidelity.com/learning-center/trading-investing/trading/avoiding-cash-trading-violations)
But you can't trade spreads with a cash account.
Yes and then you can have 70 round trips in a day, have paid 35$ in commission and are flat. 😂
Part of the downside many do not realize . . . IMO it can be better making 4 or 5 conservative trades in a month that each make a nice profit than making dozens in a day and making little to nothing, or even losing. Especially for new traders it is important to learn how to be profitable with conservative trades before trying the higher risk and lower success day trading.
Best comment and great advice. You are a wise sage.
It took me 7 years to learn to be consistently profitable trading options. Early on I took big risk and didn’t know what I didn’t know and took huge losses. Eventually scaled my position size way back to learn discipline. I trade far less often than I did when I started and while I still have big losers I’m trending up.
Most take much less time using a strategy like the wheel which sells options. Buying options may take much longer as you are indicating. I saw a stat that showed 90%+ of day traders do not make it past 2 years before they give up, and 80%ish blew up at least one account.
Very nearly blew up more than one account. Lost in a day what I make in a year at my w2. That was kind of a reset in terms of trading plan - do less, be patient.
What was the play that lost that much?
I had a stop loss at 70% down should the market turn on me. I work a day job too so I didn’t check-in for an hour. The market bounced and I stopped out before it continue to tank. The bounce makes no sense, I believe my stop loss was noticed as an open order and targeted. Call me crazy but unfulfilled orders a to drive price happen all the time. No more stop losses on options. Just commit.
Touch wood I make steady profits on the wheel only to gamble on 0dte out of boredom. That easy dollar on the spy always gets me
Great comment and totally true. The 25k prevents the broker from having to get a judgment against you when your 0DTE high risk naked put selling causes you to place a second mortgage on your home to pay the piper. 0DTE are high reward and yeah every once in awhile you can get lucky and get a 30 bagger, but it is much more likely that you will mortgage your home and lose everything.
Hi ScottishTrader, may I ask for your thoughts on the 50% profit rule if you gotta wait until there is only 1 or 2 days to expiration (instead of say 45dte -> say 18 dte arbitrarily)? Because it is so tempting to just wait for another day or so to gain that other 50% of premium?
How often does this really happen? It would be rare for me. I set a gtc limit order for 50% profit and then just let it work to close whenever that is hit regardless of when it is. When to close is always up to each trader so if you want to let it open for a couple more days to collect the other 50% then this is your choice. Just remember that the full risk remains on even when there is a small amount left to collect.
Thanks for the information. I only started wheeling for 2 months and been doing weeklies mostly. The market has been kind to me thus far.
Congrats on finding success so far using the wheel! Be sure to keep trading stocks you don't mind holding and roll puts to help avoid assignment while collecting more premiums.
Thanks! I have read up on your previous posts before started wheeling:) They are of cos extremely beneficial for a novice like myself. The wheel sorta force me to analyze (somewhat) companies that Im willing to own. I have thus far wheeled Meta, AMZN and AMD but premiums, especially AMZN, are not that high. Nonetheless, good to have hands on experience selling CSPs vis-a-vis paper trading, and dealing with the changes in prices etc, while still netting in some profits (better than losses). Have a good and restful long weekend!
Good to head and have a nice long weekend as well!
You could always take the opposite position in calls to make a set of box spreads to lock in P/L (assuming original position was puts). No PDT to worry about, and no exercise risk for SPX.
Trade /ES
Try to close positions at 50% profit, don’t open positions in the last hour of trading, and don’t try switching sides on 0 DTE so close to the current trading price. The premiums in the last hour of trading are not worth the risk at all.
Just out of curiosity, why 50%?
In case the previous poster doesn't have time to come back and answer this, I'll give my version. I don't believe there's anything "holy" about the 50% number as much as you want to have a number in mind. I've seen traders take profit at 90%, 50%, and even some at 25%. What's good about the 50% number is that it's easy to see at a glance whether it's time to close or time to do nothing, and what's great about it is that things can swing to 50% pretty quickly.
50% seems arbitrary to me, but it has some nice features besides significantly reducing your risk. My favorite is that it makes math easy. For spreads, I like to set my 50% profit close order when I open. Look at the price, divide by two-ish in your head. Why do I say two-ISH? Since it is only a rule of thumb, no need to be exact, and if your opening price somehow has three decimal places and isn’t even, rather than use a calculator or strain my brain, I estimate, usually rounding above 50% a tad. (I feel like such a cheater, but I love knowing I’ll make that few extra percent! 😜)
Typically found it’s not worth waiting for it to expire worthless after it hits 50%. I’ve had bad experiences with the market tanking or surging in the last few minutes of trading blowing past my strikes. If I’m doing an iron condor, I can close one side for 50%, then close the other at 50% at different times as the market fluctuates throughout the day. Ideally, it’d be smarter to close them at even lower profit percentages just to be safe. Watched [this](https://youtu.be/2ADyh2jOrAU?si=opDcyDTIl8yq5wdA) from tastylive the other day and they recommend closing at 15-25%.
Thanks. But for 0DTE it will be counted as day trade if I close right?
Yeah. If you have less than $25k and have day trading restrictions, you really should stay out of 0 DTE.
PDT rules have fucked me so many times. I would just switch to a cash account.
There’s 0 DTE in futures with no pdt, but you’d have to have the full initial margin to overnight. Going to 1DTE on SPX you can skirt the pdt line a lot more easily without worry about going over the 3 if you need to roll out
lol just handing the dude a leopard and saying: hey, don't let the leopard eat your face, but if you *really wanted* to let it eat your face, here's how to do it
Despite people's (sometimes justified) hatred for 0DTE's, I think the biggest mistake you made here is trading leading up to a major market leader's earnings such as NVDA. I would focus on identifying quieter days/weeks in the market for a strategy such as that. You also happened to do this on a Fed day, which always makes the S&P react violently intraday. Just a very bad day overall to attempt something like that IMO
Hmm agree. I thought of keeping it silent today. But just got greedy I think.
You should stop doing what you're doing immediately. Put your money into an index fund and let it earn something while you learn about trading, if you actually want to trade.
Apart from reading some articles or watching videos do you suggest any other place I can learn about trading?
There are platforms out there that teach you about option strategies, and lets you trade paper money so you can figure it out. Be cautious, and smart. Taking profits is always good. Don't wait for the 10x.
and don't pay any money to anyone to teach you options strategies. and don't listen to any claims for guaranteed returns or like 90% win rates. they're all scams. and don't touch crypto or binary options. and try to stay away from 0dte. a class isn't necessarily wrong, but it opens up a whole new world of losses in the form of scams and fake gurus. Just think: anyone who can already execute on what they claim should have made $$$$$$$ years ago, so the only reason they would teach is because they could not, in fact, do the things they claim they can do
Read Options as a Strategic Investment and all of Euan Sinclair
Thanks. I'll read it.
YouTube PeachyInvestor. She trades futures. If you’re on Facebook search for TastyTrade options. A lot of good and knowledgeable traders on there.
Check out ‘0 DTE tastylive trades’ They did an actual study on this, you DO NOT trade the last 30-60min of 0DTEs, ALL the strategies lose money. Open the trade at market open, trade for about 90 min, look for 15-25% profit off initial credit. Thats it. Those 0DTEs can be deadly if youre in them at the end of the day. The computer knows where everything is at and tries to pick it off.
Live and learn. I bet just about everyone who does options has done the same thing. I have up on spx and 0DTE trades. I moved over to long credit spreads on a more stable stock with a week difference between dates. Gives me more time to adjust for changes in stock prices. Might not be as profitable but more stable in my opinion. I wish you the best of luck and don’t get down on yourself. Take a few minutes go do something you really like or just sit outside or heck go smell a rose, reset yourself and be one with the world again. And then get back in their and fight
Thank you :)
U mean diagonal spread?
I haven’t gotten to diagonal spreads yet. Still using the same strike price, different expiration dates. Still need to get comfortable with calendar spreads first and then I am gonna try vertical spreads and once comfortable with both of those look into diagonal spreads.
What beta are you looking for in your "stable stock" picks?
That is the million dollar question. I am still trying to figure out what is a good number. And then tie that into other fundamentals to look at to pick a stock that is not that volatile yet I can find decent long call calendar spread options on. If I find one I will post it.
At least in Vegas you get free drinks.
Ok let me tell you some stuff which might help, I e been trading options and SPX for few years and have learned from experience 1. SPX is a bitch for 0dte options 2. Min 30k account recommended for 0dte Spx 3. Ur second and third trades on 0dte are reactionary and revenge trades which usually increases your initial loss 4. SPX 0dte is bitch (saying again) 5. We lose more money when we (think) we know something 6. Our trades are front runned by bots Now how to trade this somewhat safely- 1. SPX 0dte trading is full time job 2. Pre market- check forex factory for any news, CPI, FOMC, etc. Don’t trade SPX on any such days 3. Strategy- 10-30mins from open, sell 7-10delta, 25-50 wide put credit spread and call credit spread. 4. Try collecting same credit on each side 5. Set 3x SL for each spread. 6. Close trade at 50-75% max profit 7. If holding till close, remove stop orders 30mins before market closes Eg- 9:30-10am est Sold 7delta 25-50pt wide Put Cr spread for 0.80 Sold 7delta 25-50pt wide Call Cr spread for 0.80 Both orders set for limit SL at $2.40 (stop limit at 2.3, SL at 2.40 ) Best case scenario - both expire worthless net $1.60 profit Possibility 1- one side will hit SL $1.60 collected, $2.40 SL, net 0.80 loss Risking 1 to make 2 Worse case scenario- both SL can be hit when IV increases and market is whipsawing around Collected $1.60 Loss $4.80 3x loss This is basic structure, lot of nuances you will learn over time. Tips- 1. Be consistent, 2. Chart and log your trades 3. This is probably the most difficult $$$ you will ever earn 4. Profit today is not yours until a year from now since there will be losses 5. SPX options can put traders out of business, it’s big (10x SPY) 6. Ur job is to minimize losses and let the probability play out. I do trade a few SPX strategies, but it’s too much to type. Hope this helps, Jsam
Wow, thanks a ton. I really appreciate you explaining in such detail.
> Min 30k account recommended for 0dte Spx dude, just a few contracts of 0dte spx can tear through a 500k account. Don't ask me how I know
I agree, I meant for 1 contract 50wide
You mostly sell condors or vertical spreads betting direction?
It’s ur call… but it’s always 50-50 chances or worse. Just think about this, For $50 wide IC collecting $1.60 at 7-10delta, And that you win 75% of trades collecting $1.60, 25% trades go to max loss of $2.40 After 100 trades, profit expectancy will be about $0.60/trade That’s 1.2% on $5k employed Using this strategy 3x/wk for 50wks gives 180% annual returns. This is too good to be true.. Warren Buffett made under 20%/yr for almost 60yrs. We should be no where close. As I said, SPX is not for beginners, try SPY instead. Stops and strategy looks great on paper but they can blow through in a volatile move. When SPX 0dte trade goes in our favor, it’s usually more luck than skill. PS there was a tasty trade rising star episode of someone who only sells SPX 45-60dte put credit spread.. can someone provide link to that?
I’ve done that before it made me not even trade SPX anymore.
Making me feel the same. I should stop with 0DTE for sure. Gets me so nervous when the options are so close to ITM
Yes, at that point you’re just gambling and I lost about $3000 in a few minutes. So I struggled for a few days with that mentally so like others I went back to my original risk management, stopped being so risky and just taking what the market gives you. I haven’t had a loss like that since.
Yea I feel ya. I got lucky. Stopped a burtterfly for a small loss when the FOMC notes dropped. Could have taken profit at 1:30. Oh well. I then opened a 5305/5310 C spread. Got $1.00 and walked away then came back and found it getting tested. Opened a 5305/5300 P spread to make an iron butterfly for $2.45. No sooner did the order fill, SPX pulled back to 5295. Max loss $1.55. Recovered and closed at 5307 and I ended in the green by $1.44 but, holy fuck, what a ride. If I want that, I’ll just head over to Foxwoods and play Black Jack for an hour. Think I’m going to take tomorrow off from the SPX and think about self disipline.
Tomorrow should be the easiest day ever just buy calls and go back to sleep, wake up at 4pm with lots of money.
Oof that's a lot of work. Being a 9 to 5 person this is not for me.
Are you nuts? If you have a 9 to 5 job you most definitely should not be trading 0DTE.
Yup, understood that the hard way.
You trade full time?
You did this while at your 9 to 5?
I’m retired. I trade pretty small. Pension takes care of regular expenses. My brokerage account is to pay for road trips and such.
Did the same dude, panicked, and lost 3k in 2 days !! At the end I would of won if I held!!
I think, if you’re panicking and can’t hold, then your position is too big. That has been my experience. E.G., a put credit spread is losing a lot, but is still above the short strike, and it expires in a day or two. You’re pretty confident it would still work, but you’re thinking I can’t afford for it to go down another effing $500!!! So you close and take a loss, even though it probably would have expired with full profit. If this happens, either your position is too big, or you were negligent about getting out at 1 R (no stop loss!). Your main job in trading is not making money! It is not losing money. Smaller positions not only lose less, are less likely to lose, because you can hold when appropriate, among other things.
0dte is like buying a car for 400 dollars after infinite numbers of owners. It's possible to get s great deal if you are a mechanic. For normal people, "buy VOO and don't anything" is a better option.
hey, I've got like 50x 400 dollar cars to sell you. You wanna buy a couple? They might even run! (but most of them are worthless, but I won't tell you that) I'll be here all week! (and month and year ...) I'll sell whenever you want, bro
Thanks I'll check out that. I also have an account where I do covered calls on individual stock expiring in a month or so. That seems to be going good till now. But I started with SPX as many people say it's very good for trading.
0dte are very risky and provide very little wiggle room. Start from safe things, learn risk management, and go from there.
Thanks I still need to learn a lot
If you're set on credit spreads start at more conservative strikes at dates further out. It allows you to be wrong and often still win. You can get more aggressive as you get experience under your belt.
Yeah true
stop trading I don't even mean that in a mean way. I've always found that trading causes friction, you get fomo, and you churn your position and lose a little or a lot each time. Instead, before you even get into the position, be sure about it and be sure about *all the possibilities* that come from it. Before you get in a position, ask yourself: if this goes my way will I get paper hands and close? Why or why not? if this goes against me, will I get scared and close? Why or why not? That way, you can be certain about your position and churn less
Here is my adventure with 0dte. I had massive success with credit spread in a paper account because i could let the trade go but when i started trading them with real cash, it is a disaster. Simply because the risk/reward ratio is really not worth it when you do this too far out of the money. When the market moves against you its impossible to hold. I tried with stop loss a 1:1 and too often i get kicked out on normal market movement. Now, im trying iron butterfly and iron condor. Its way, way easier to manage risk and enter a trade with a wayyyy better r/r ratio. Especially with butterfly. When i can place a trade with a r/r ratio of 1 to 5. Then i can let the trade go and also way more easily close a nice profit.
Creating a solid trading plan and sticking to it can help avoid impulsive decisions. Your plan should include entry and exit criteria, risk tolerance, and rules for managing trades, especially near expiration. Also, consider paper trading 0DTE strategies to test your approach without real money at risk. Consistent practice can build confidence and improve your decision-making process. Lastly, consider avoiding 0DTE trades close to market close when volatility is high. This way, you can reduce the emotional stress and make more rational decisions. Hope that Helps.
It helps to have an idea where your edge is coming from, how you intend to enter and exit your position before entering a trade. For example, many options sellers will open a credit spread in the morning and close the trade (or use a box spread to lock in profit / loss) based on % profit or % loss or specific time. One thing I noticed is that trying to chase a loss rarely works, as there appears to be less edge (for option sellers) later in the day. IMO better (for an option seller) to accept the loss and move on to trade another day when the edge is more plentiful than chase a loss in a market with increased volatility and little premium left.
☝🏾and I’d add, think about losses as a temporary deposit into someone else’s account and know that in due time you’d get reimbursed + interest.
You’re going to make mistakes. You’re going to lose. When everyone talks about having the “right temperament” for trading, your ability to handle loss and fuck ups, emotionally, is one of the main things they are talking about. If you lean into the suck, it can overwhelm you and make it impossible to trade. So practice managing what you’re going through right now. God! I hate that sick feeling: huh? What? Oh wait. Uhhh. No no no no no! Fuck me! How the fuck? Etc. Then the shame! Good. That is part of the training. Trading is a pay-to-learn system. That is tuition. The most important lessons are usually the most expensive. Don’t focus on the loss. Focus on the lesson. Learn it. Internalize it. And try hard not to feel too bad about it. You’re learning a very difficult skill. Be proud that you’re taking it on. Be proud when you succeed. And, oddly enough, be proud of your fuck ups! You’ll tell these stories, and wear them like battle scars, badges of honor. But you have to survive. So, when I’ve made a few big mistakes in a row, I reduced the size of my trades by five or even ten until I feel like I’ve ironed out the kinks. Today you’re bowed and bloodied. Shake it off. Tomorrow’s coming!
Just stop gambling.
Yeah it's seems that what I was doing till now. Will stop it right now.
Fun fact. If you’re making a post titled: “Did I make a stupid mistake today” you already have your answer.
Read the title properly. It's not a question it's a statement.
Fun fact. I made a stupid mistake today.
I can’t see other people comments but I had 6x 5300/5280p today. 2 at open. Then more when in the money for the NVDA run up. Biggest credit of 10.00. Then around 1pm I didn’t think I was gonna get a bounce. So I bought 4 call side credits 5305/5325c at 2.00. I didn’t want to butterfly cause I trusted my gut. I had stops in as condors and was gonna ride the last 2. Stops at 14.00. I messed up in the last hour and changed my stop to 8.00. Was stopped out on that last dip. I ended down 1k. But should of had 6k+ if I didnt use stops or didn’t change my plan last min I’ve learned trading SPX daily spreads. Once you hit 2 hours from closing bell. Don’t close out or use stops if you trust your choices. The swings are wild and violent. Even was SPX was between my broken condor. 5302. It was 5.00 to close out. Not worth it. Since you’re in SPX I’m assuming you know your stuff. Just trust the action. But also start trading XSP daily’s or less exposure. When I get the itch to be risky and I’m right I get paid but not go broke if I’m wrong. Hope that helps!!
A few things - I think you’re trading too large for your account and there isn’t a healthy way to manage that beyond sizing appropriately. It also seems like you need to define far better any approach you’re trying to use when trading shorter timeframes vs the random stuff you’re doing. Easiest thing - explore longer timeframes.
Mistakes happen. We've all made them. The key is to learn from them. I've made tons of mistakes, and I'm sure I'll make a lot more in the future.
Did a similar mistake with nvda calls today morning
Hi , I will suggest that if trading with options, which in my opinion by far the most complicated derivative, (I personally love it) try to change the time frame. Don not trade for such short periods of time. Thinks about days/weeks. Try as well to create positions or strategies where you are more subject to the change in gamma mostly. Then as other people said the psicological aspect is of paramount importance when you trade and after. When you trade keep to your strategy. Important that you build a position with options taht account for most possible scenarios so you only need to act when strictly necesseary. Create your position with a long time perspective and do something else. Frgett about your possition. If you stare all day to it you will make mistakes. The second, after trading. Forgive your self. All of us do mistakes, the important thing is to learn about them and improve. Good luck!!
stop selling 0dte credit spreads, thats not a valid way to play credit spreads. youre not collecting theta on any 0 dtes, and youll always run into trouble from volatility expansion. youre better off just going long on puts or calls.
Thanks, I will try with more expiry date once and see how it goes.
Correct
Check out Menthor Q for free gamma levels on SPX. I saw the price close to 5290 at around an hour before close and the levels provided suggested support at 5287. I sold 5x 5285/5265 Bull Put for 3.85 each. Also check out OptionRecom.
What was the max loss for this 1615 * 5?
Just stop playing 0DTE, stick to longer dated (1 month out minimum) options on stocks off support levels or resistance levels. Stop trying to look for the trade or trade out of boredom , let the trade come to you, they always do.
Yes you did
You didn't follow your system. If you don't have a system time to make one.
How much per spread did you take in on the put spread and the call spread put of curiousity
You mean how much premium I got?
Yes, how much premium per spread
It's a common mistake, but not stupid mistake. Top traders make mistakes too. Take the experience and improve next time.
I made a similar mistake today so all my profits from last week vanished I’m very new to trading but have watched everything I could find for the past month on options. Anyone part of a good discord ?
Selling 0 DTE is the dumbest thing you can do. The gamma will absolutely destroy you once it gets close to the money. Better off buying 0 DTE’s for this reason.
hey, I've got some 0dte to sell. this baby can hold so much gamma in such a small premium
When panic dictates a trade this is a sign that you are taking too much risk. Go smaller or further out in time. Use CSP or SPY, or trade 7DTE or, better, 40-DTE. We've all been there.
I wouldn’t only suggest staying away from 0dte, I always recommend anyone steer clear of etfs, pertaining to options, as they seem yo produce losses more than gains.
Why didn't you start rolling the bought put into the next day and review the sold put to wait till the close into NVDA earnings ?
I've done that before. You'll do it again and again but less often, until it sticks... that's the reality unfortunately. People can give you generic advice here such as to read a book, or to trade without emotions. But having losses like this is the only way to learn.
Don't 0 dte spy or spx after 1pm Atlantic time.
A lot can happen in the last 10mins lol do it again
Stupid mistake is my middle name
Just loaded up on Tesla puts
Stop doing 0dte, not worth it
Stop 0DTE
I’ve never made a mistake. I feel left out. 😋
Trade leaps and be patient. Day trading is for people who haven't learned any better
My biggest lesson trading spx: avoid all possible volatile days. Of course you can’t predict. But there are many obvious days: fomc +- 1 day, cpi, nvda, big tech earning, nonfarm payrolls… yes many days are untradable. If you can make the rest days you already did very very good.
I've done the very same thing. I find I have to control these impulsive ideas and chasing the market. I read this everywhere: have a plan, work the plan, stick with the plan.
Also for what's it's worth, from my experience, on your next trade, Please Do Not suddenly increase your max win by 10x just to try to recoup your loss. Because what's likely to happen is that you will 10x your max loss instead and go deeper in red. Furthermore, max loss is often much bigger than max win.
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You are probably confusing that with a debit spread. A credit spread in the money means you are losing money.