Are 0 DTE Trades Just Gambling? We Backtested It. | Zero Days to Expiration Crash Course
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I don't follow the comment about neither party having an edge. They showed that on average implied volatility was higher than realized volatility. By definition, then, wouldn't the seller of the 0 DTE option have the edge?
Ding ding ding. you win sir. This is the way
“Present fear of future uncertainty is fundamentally overpriced.”
@@zoraster3749 preach brother! This is one of the only "known edges" in the markets.
Tom and Tony when you say high vol, you done very well. What is the symbol of this High VOL "_______"
10:50 add fees and commissions to cost to trading. It’s not just bid/ask. 0 DTEs @&$* you in fees.
WSJ did a piece on me about 0dte being gambling. It was very one sided… and not an accurate representation of the conversation I had with their journalist. I only sell, I try to talk people out of buying short term options…
I was interviewed by her too. I thought I was grateful to be featured in WSJ but, after seeing your comment and her coverage of others in an attempt to keep the "meme stock mania" alive, I'm more grateful that I wasn't featured.
How are you so blind to say the only cost is the bid/ask differential??? YOUR COMMISSIONS ARE ASTRONOMICALLY HIGH!!!! 10:40
you obviously dont trade options. @@rsbmg
Literally every other broker. @@rsbmg
10 years ago you’d be begging for these type of commissions 🤣
you left out the commission cost, you can turn a bad trade into a good trade by 1) re centering at appropriate deltas and/or 2) rolling out to next day
High theta and yeah, roll Friday 0 dte to Wednesday get the weekend theta?
Maybe you would do better selling one leg at a time, after the underlying has moved over 1-standard deviation, which will put you closer to the tops and bottoms by being a little bit contraryion.
@@rsbmgalways have an exit plan regardless. So when it doesn’t work, get out
The problem with this approach is even if you may be correct on one leg, it’s tough to wait or even enter the next leg which = lower P&L.
Sounds great in theory but tough to capitalize in practice as you’re now adding a timing element to legging in
good afternoon, do you guys have any training classes for 0dte? Thank you
Blackjack's negative edge is only .5% when played correctly with standard rules)
dont even have to watch . its all gambling just the timeframes and vol differ
Regarding the statement, "Since you can trade both sides of the zero DTE options, there is no edge to any party," there is an inherent edge to the seller b/c of theta, which acts fairly aggressively on ODTE. Seasoned options traders like yourselves know this so I'm guessing it was taken for granted (or you're looking for customers🤣). e.g. the market goes sideways for 5 min and the buyer loses money. Posting for clarity for those who haven't taken part in the 0DTE market. The corollary is that a seller lacking risk management can get burned quite badly since it's not uncommon for OTM 0DTEs to see several hundred % or even over 1000% gain.
I think that what he meant, was that there is no edge to either party before you ever place the "bet" (like in casino games). You play in the casino, it's rigged against you before you even walk in the door. The casino WILL make money, period. Whereas options are not "rigged" to either party at the outset in such a way that an outcome can be predicted.
It's a subtle difference, and I was thinking the exact same thing you were, but I think that's what he meant.
🤔
Can you do an indepth video on the "Tasty way" to trade earnings? What are your favorite strategies and why? How you'd trade if you have a small account vs. a bigger one? Which Delta would you choose and why? If you've already done such video can you reference it here please? I wasn't able to find it. Thank you guys! You rock
They would say to do a 16 or 30 Delta 45 day strangle and to manage at 21 days.
Lol! I would think you're oversimplifying it a bit. Given their experience I would imagine they would touch on more strategies and their pros and cons like a double calendar spread, or a jade lizard, especially if you have a small account and can't afford a strangle...let's see what they're replying...maybe my question is not that interesting.
@@Fedebello73 Idk I highly doubt they'd deviate from their bread and butter strategy. The odd time they discuss alternatives, but not often.
Thank you, appreciate your feedback.
Look for their CRAB trade. Its semi neutral. I have had success but I've also been burned by outlier moves on stocks like DG.
Reminder : tasty charge you 2.5 per leg
Um ackshually itsh 1$ per leg opening only 🤓👆
Buying yes, selling (covered) no.
The whole thing is gambling!
Did we not look at strangles? Easy to roll out and widen if you’re wrong.
Try explaing 0dte options to my wife!!
This is what I don't get. How do you all trade just for engagement? It's like saying you trade for fun. Aren't we trying to make money?
We all have a lil degen in us 🤣
Better than your commissions 4:35
Thank you for the video BTW. Also, curious if making it was brought about by the WSJ's recent article from Sept 12, "Amateurs Pile Into 24-Hour Options: 'It's Just Gambling'?" And, what do you think about event contacts? Can you please do a video on your thoughts about those? Thank you.
Ha! Lucas Sommer from that article checking in 😅
It made it look like the people interviewed were dumb YOLOers with a gambling addiction, so severe that was causing marital problems, and such. Most likely it was a recollection of times where they were building experience, as all of us do during our trading life. Reportes hear what they want to hear, whether you agree or not.
@@LucasSommer Hi Lucas, thanks for showing up! Also, thanks for doing the article. Curious, do you trade anything other than 0DTE? Also, which Discord are you on? Is it a private group or open to paid members, etc? Thanks
0-DTE have very low premium, so maybe you should look at 2 or 3 DTE.
Look at the annualized returns (in theory) and you won't think that any longer.
overnight risk can cut your head off
Lol all short term strategies is gambling. Can’t predict the movement 45 days out no more than you can predict one day move.
Hint: anytime probability is involved it's "gambling." That doesn't mean you can't get great EV on low probability events. Pot odds.
All options and all stocks are gambling! The only sure entity that makes money is the broker!
@@rsbmg It is all gambling! Just by the fact that they are talking about probabilities, expectancies, implied volatilities that implies that you have no control over it. That is gambling! It is never a sure thing! These guys have not shown a single strategy with edge. Perhaps they keep that secret!
@@rsbmg Lol yeah to this guy everything is gambling because he doesn't understand anything :p
@@ricomajestic No, gambling is when the odds are against you, but you do it anyway, knowing you're likely to lose. The total stock market has returned 10% per year on average for a century. The odds are (well) in your favour, as it is investing, not gambling. Now in terms of options, buying them is gambling, selling them (covered anyway) is not, for the same reason.
Do you even trade? Yes, traders that understand what they are doing understand that it's all probabilistic. But so are most things in life. e.g. your car insurance company probably knows the probability of you getting into an accident. Your health insurance company probably knows the chance you have a heart attack. Also, you could say the house of a casino is a gambler as well, but they play with an edge in their favor and typically don't go out of business b/c of their bets. Don't be too discouraged if you've had a rough time, do the work and figure out some probabilities that you can put in your favor.
@@djayjp I have an edge with a positive expectancy but it is still a gamble and I wouldnt bet the family jewels on it. No different than a casino who never allow limitless bets.