We Found The Best Profit Targets for 0DTE Options
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- เผยแพร่เมื่อ 18 ธ.ค. 2023
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Guys we're loving these 0 -1dte studies. Keep it up! We want more!
It would be nice to know the average loss for the losing trades as well as the maximum drawdown of the account during those 9 months that you tested.
This is the study that clarifies the rest of the vids on here. I've been playing with opening one side at a time. So far it's been working great!
Could you explain what you mean by one side at a time? Are you opening the short straddle first and then opening the long calendar strangle? Or you are opening either the bearish/bullish diagonal first and then adjusting
Huge fan of the channel! Thanks for the great wisdom.
Aren't the long positions more to reduce buying power requirement than for protection?
For closing the trade, I go by their management video of a few months ago, which showed that 25% profit target or 50% loss reached or 1 hour time passed reached worked best for recentering the trade (whichever comes first).
Yes I agree. A 30 day with 20 or even 30 delta strangle has almost no protection for 1-day movements.
awesome work guys this is my favorite video yet
I'm interested in testing different lengths of the diagonal wings. Testing 30 day vs 45vs 14 vs 7 vs 1? Would be interesting
Yeah, buying 30 days of "protection" for a 0dte straddle seems too much, and that really eats into the profitability of the straddle.
i actually think the bigger difference is the short side of the diagonal… going 1-2 dte has been helping my friends a lot more than the pure 0 dte
@ryan : I have been thinking about this strategy too. How has it worked for you so far
Not only for profitably but for BP management as well
Would it be possible for tasty research team to do a similar topic on the best profit takings % for just trading the first 1.5 to 2.5 hours into market opens via credit spreads or iron condor. Yup, this is requested specially for retail traders residing at places half a day ahead of market hours opens. Thank you.
This is super interesting. I'll be curious to see how this data plays out over the next 12, 24, and 36 months. If this data remains constant, or anywhere close to what is being shown here, this 0/30 DTE Diagonal Rolling strategy seems game-changing.
Do you know if they have a video that explains the mechanics of doing these diagonals as well as rolling the wings? This isn't a trade i'm familiar with. I guess what i'd specifically want to find out is when you oll the wings? Same day? The next day when you put on another 0dte guts? If its same day, do you roll to a 31 DTE so that the next day your guts will have a 30DTE?
Where can we get access to the SPX option pricing every 10 minutes? Have some python back testing to do! Thx!
Today at about 1030 NY time I bought a 1 lot XSP double diagonal - 0dte straddle at $478p/$477c; and 7dte $472p/$485c. XSP price has gone sideways, best case for a short straddle, and it looks like I will have a good shot at full profit, which was $0.97....
I have not traded these with 30dte for the strangles. Alo, instead of "re-centering, I have been managing the diagonals separately, when the underlying price is moving.
put diagonal stopped out on big dump @ 1430
Anyway you guys can use charts/ OP chain, etc when explaining, I’m more a visual guy, the numbers click better when I can see them in their work positions ?? 👍 👍 PS I don’t like to mess with the 0DTEs, but I do every once in a while, I’ll treat myself on a Thursday or Friday. I’ll scalp them, Either long/short, don’t keep a firm Profit level, just let the VPA tells me. 0DTEs can be fun, it’s like a weekend at the casino, you don’t wanna lost the money but you are having a fun time if you do. And every once in a while your clear some good gains with a great story, how you capitalized, but in the back of your head your not even sure 😂 😂 😂
How about a study where these 0dte diagonals are recentered every hour or after a certain delta is reached?
How do you manage losers? For purposes of the last study I think they were left to expire, which on a big move could be a loss 2 or 3 times the straddle credit? I've only done 2 of these double diagonals yesterday and today, both small winners. I saw several people asked the same question on the previous 0DTE videos. Also a lot of people asked about the details of rolling at 25% profit. Today after SPX moved up 15 points above my short strikes I rolled the straddle 15 points up and to 1DTE at a credit, lowering my cost basis by $450. Eager for suggestions.
15 points on SPX isn't much runway. That can happen a few days in a row.
This is my new thing to stay engaged in contrast with the 100k low correlation portfolio piece
Is the recentering roll a movement of both diagonals, or a movement of just the straddle?
You would just re-center the short credit straddle. And sell to close the long strangle at market close.
Yes but how about the commissions, you have to take that in your research :) Just unmanaged, selling and closing would be 8$ only in commissions...
U need to change broker. $8 commission is too high for decades!
Just to clarify, when rolling, are you doing so when price of the underlying hits the break even point in either direction? Also, are you rolling both the 0 and 30 DTE options?
let's do a study where you place the 0DTE diagonal at market open versus 30, 60, 90 and 120 after market open. I wonder if SPX is less likely to make large moves 60-120 minutes after opening.
I do 30-60min after opening. I feel the first 30min of opening has too much noise. Let the market settle and then ride with it
@@nobnoba agree but if also mean the premium collected with be less due to decay.
When they talking about rolling, is it just closing/opening the 0DTE short straddle and keeping the 30DTE wings as is. Or close everything and start over again with a brand new ATM position on the 0dte and 30DTE?
the way they describe, keep 30dte as is until done for the day
How is re-centering done?
When do you roll? Is it after you take profits, putting on a new trade ATM, or is when it gets out of a range?
Roll at profit target: buy to close, sell to open at new 0DTE ATM
@@sethhanson4485 Do you also close the 30DTE wings or just keep them as is?
Do we take losers to expiration?
that's what they say in the video, for the purposes of the study. Doubtful that Tom/Tony would wait that long
@@RickCromer
This is excellent. How do you derive the 1 day expected move from the VIX?
Also, what are the mechanics for rolling the Iron Fly?
Tasty works shows the upper and lower expected move on the Options Chain
@@delprior8542 what if you want to derive them yourself?
@@delprior8542 Mine only shows one expected move number and its wildy lower than calculating it off the vix. Today for example with VIX at ~12.42 and SPX at 4780.23 using a VIX dervied EM we it would be $37.14 but Tasty shows $20. Using the ATM Put/Call method gives $24.
Is there a video on how to do 0DTE "diagonal rolling"? Thanks
Just close the shorts and sell new ones at the current price of SPX. You can leave the longs on, only close these when you finished trading for the day.
So , what’s the best strategy for a 0 DTE On the spy ? What’s the delta?
guys...where do you find VIX implied move if i can't have tastyworks?
I know it’s indicated on the right side of the options chain on thinkorswim, probably should be there on any platform
What would a good Stop loss target be if i did not want to hold the losing short straddle until the "close of market"? Would maybe 125% of credit received be okay to not get stopped out to much? It would be nice if Tasty Trade could add this metrics in there next TH-cam video.
I think tastytrade mechanics is NOT to manage losers for define loss trade.
Curious how the "Losers are left to expire" is working out today, LOL :) :). 0dte without a stoploss is reckless
That's why you buy the wings - to ensure you have a defined or max loss.
If you left the losing position expire on a 0dte how can taking profit on the winner at 10% cover the loss.. especially selling calls puts will have unlimited losses in theoey
Which is why in the study it shows that 20%-25% target is the best
Can anyone explain what the VIX derived expected move is? Is that the same as the market maker move in TOS?
To convert the VIX to a daily volatility number, simply divide by 16%. For example, a VIX of 12% divided by 16% = 0.75%. This means that the VIX is "pricing" about 0.75% daily volatility. A VIX of 16 would imply 1% daily volatility.
@@user70331 Super helpful! Thank you for taking the time to reply.
@@user70331how did u get 16%, is it a static value?
What happens if the price breaches the long strike before you get to your profit target ?
For an Iron Butterfly, if it stayed that way at expiration, you would take max loss. Unlikely to breach long strike on a diagonal- you shouldn’t see a one-day move that large
@@sethhanson4485 Tom said that the longer strike is placed at the daily expected move , in spx , that is about 50 dollars . I’ve placed this trade in a demo and it resulted in huge losses . I’m not sure I understand what the long strikes do .losses accumulate very quickly when the stock reaches it .
@@sethhanson4485 you definitely will see moves large enough to breach the 30-day expected move, which is where the diagonal strikes are set. The late 75-pt dump in 2hrs on 12/20 a good example. If you hadn't taken early profit on the put diagonal, only a stop loss could've saved you from max loss. Rolling that late in the day is not going to be better than setting a stop loss order. Days like 12/20 is why tasty preaches early management.
How do you calculate the VIX derived expected move?
I believe it is 1 SD (standard deviation) the blue dotted line on platform.
that closer joke
It is very scary to hear - I put in a trade earlier today and after a few adjustments only down a few dollars. so I guess a person not as expertish as Sos to make those few adjustments will lost his shirt
Can you please use visuals
5:50 timestamp - Bat just slams Tom out of the blue with that closer comment. Gave me a good lul.
whoa
10:46 “15 - 20% range is pretty strong” every slide showed 15% was a disaster
i dont understand Tom, He said in this video he didnt roll positions yet (diagonal rollers part) but the previous days he said he is rolling their 0dtes...
Looks good on paper, but fees will kill them all...unless IV really high, these strat will not result much profit.
Maybe if you aren't using SPX. Using these strategies you can estimate pretty easily how much the fees would cost and compared to the expected gains shown in the video, the fees would be relatively negligible if trading SPX.
are the losers at expiration?