Avoid This 0DTE Option Strategy



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20 thoughts on “Avoid This 0DTE Option Strategy”

  1. Excellent video. Even after 20 years of option trading ,this video was informative. A question. You are talking about S/l in %200 or %300 percent for strangle which are undefined risk trades by nature.what are you referring as %200 max loss in an undefined risk trade? Are you referring to 200% of original credit ,when you say %200 of max loss?

  2. Erik, this is a grea video. I'm a beginner to options and really enjoy your communication style and teaching skills. One question regarding the max loss strategies, did you test at 100% and 150% max loss? How did KPIs change vs 200%?

  3. Can you look into the efficiency of using span margin (lower buying power effects) via /ES futures options for this strategy? SPX and SPY have way worse buying power reduction.

  4. Any thoughts on 45dte strangles on smh? It has extremely high iv so we could take advantage of that or should I go with the Russel instead? I'm trying to find a lower price cash settle ETF

  5. The max loss was capped at 200% and 300%. The trade was closed at what porfit percentage?

  6. ROI needs to be considered here….. 90 000 margin on strangles in non PM account vs. 1 – 2 000 on spreads means 50x better yield…..

  7. Glad you're following up on your previous video on 0 DTE. I'm surprised to see only 14 strangle trades that would be winners get stopped out with a 200% stop loss, I thought it would be way higher. What's the reason you only opened the trades 1 hour before market close? Commonly people open a trade a bit after market open, did you discover something that made you decide otherwise? Personally I'm mostly selling calls at resistance levels, usually around 10 delta or so, and a few days out in time, and rolling out if tested. Works well so far, could you backtest something like this?

  8. Can consider mes or es short strangles using span margin. Bot a fan doing that at 0dte though unless you can keep a close eye on it

  9. Interesting video! I love back testing and case studies.

    I’ve been experimenting with doing a 0dte double calendar. I sell a 0dte strangle at the expected move and then buy the same strikes 14 days out. The 0dte strangle behaves more like a naked strangle than an IC, but I still have some protection because of the 14dte long strangle. I would love to hear your thoughts on this strategy. Thanks!

  10. Interesting video and presentation of the statistics. How are you doing the backtest? What software or platform?

  11. I been selling options for over 19 years. He’s example is very skewed. 1. IC is basically a short strangle. Just go 50wing wide each side then it’s a define risk short strangle. 2. The time frame he picked is the worst time in premium selling strategies. U don’t do IC or short strangle when the market volatility is high. You do dynamic IC, this means you put on each wing different time of the day. 3. You never put on a IC or premium selling strategy w/ 0dte 1 hour before the close. You do it during the first 3 hour of mkt open. If you don’t get in, move on to a different strategy. Or do a iron fly and try to pin the close.

  12. Nice video 👍… In terms of Greek wise pnl attribution, in 0dte I thought IV plays a very small role and it's theta and gamma show…would love it if you could just make a video on greek wise pnl attribution of these strategies

  13. What would you suggest for an account w/o portfolio margin or level 3 options (naked) permission? Is there something better? Unmanaged put broken wing butterfly? Still paying for the defined risk, but is it any better?

  14. Also what software are you using to backtest these option strategies? thank you!

  15. I been playing around with 1dte 2:30pm to 2:45pm entry double butterfly "batman" spreads and it appears like its grinding a edge in XSP. Spread size doesn't change. Buying one contract 4th strike OTM on PUT side, selling two contracts 3 strikes further OTM, then buying one contract 3 more strikes OTM. Call side buying the 3rd strike OTM, selling two contracts 3 strikes higher OTM, then buying one contract 3 strikes further OTM. Double butterflies with 3pt wide wings, with a 6pt wide "middle valley" in-between. Take to full expiration, rinse repeat each day. So far averaging 33 profit per day.

  16. Hello I just saw your chat with traders podcast. Excellent episode! I came here to get your opinion on vertical spreads, specifically why you dislike them. Do you have a video outlining your views?

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