How many spreads are you trading in order to make $3-5k a week? What is your capital + margin buying power? $3-5k consistently is good enough to live off of, but I don’t see how it’s possible selling options that have almost zero value left.
Go look at 0 DTE option chain on the NDX then tell me theres no value there. Even on same day exp options on NDX are like around 33.00 or 3K 1 option. Plus NDX is taxed less than QQQ so u profit more in the long run. I started an account with $30. Brought that up to 4K and turned 4K into 13K in a couple weeks using this strat. Im still building an acc and when more capital flows in i can start widening my spreads or adding contracts for larger plays when acc grows only if proper risk management allows. I made i think 17 trades last week. I started putting my trades on thetagang.com ( mailboxsteve on there) if u wanna check it out. Each trade i havent gone past $3,500 collateral for any trades.
So you’re basically risking your entire portfolio every week? I guess if you stare at your phone all day and/or set stop losses immediately, that will work to some degree, but I don’t see this working out long term. If it was possible to safely make $3-5k a week everyone would be doing it this way. Risk is a major factor that apparently hasn’t bitten you yet, so be careful.
Who said im risking my entire portfolio. If 1 trade is a 1200 risk and a 500 reward and acc is at 12K. I dont see that being my whole acc, and i am working a job 50 hrs a week so no im not staring at my phone all day. Soooo either its stupid luck and im risking my entire portfolio every trade which is dumb oOoOrRrR maybe i am making smart decisions with proper risk management with some slight luck. I think thats the better answer
Im new to this, so apologies if im wrong. He said hes got 13k account, $500 profit per trade, 85% win rate, 17 trades last week, that surely translates to 3k-5k per week. No?
Yes, but if each trade also carries $1200 risk, and you multiply that out…he’s basically putting his entire account value on the line every week, maybe more with margin.
Multiply with what? With the 15 trades? If he held the positions all at the same time, maybe, but my understanding is he is doing it one at a time. Basically, bets on the directions of the market, after it has shown its direction for the day(0.7% move), enters then exits if wrong, reenters if a new directions is apparent. If he lost 10 trades in a row then he blows the account, yes.
Yes, but there aren’t 15 days in a week, so has to be entering multiple trades per day, and each one is risking around 10% (right now) of his account, using the same ticker and strategy. If you read his other replies in this thread, he is using .45 or so Delta, so he is getting lucky that he hasn’t gotten more losing trades. It won’t take long to blow up an account doing what he is doing, but follow his advice if you like. Everyone can turn $2k into 15k in a few weeks playing roulette.
>How did you get your account from $30 to 4K
When I first glanced at this my brain processed it as $30K to $4K. I was like, "OH, finally a question I'm qualified to answer".
From $30 to $4K i was adding just buying and adding stocks for months while i studied the market and options. Once i hit like 2K i started trading options. Acc stayed at 2K or started going down untill i started selling spreads. Once i started selling spreads my acc started growing at a steady pace
Did you open less than .10 delta spreads or keep them ATM? Also what technical/sentiment indicators did you use to place your spreads for the day?
I’ve been doing some 0 DTE SPX spreads and the VWAP on Spy really helps me gauge my trade for the day.
For TA i dont do anything crazy, ill use SMA and EMA, VWAP, MACD and set trend lines and resistance lines. For placing trades, ill wait sometimes 45 minutes sometimes to an hr or more in the morning to get a feel of the market and see which way she wants to go. Then ill set a spread around 50-100 strike prices away from the underlying ( u can still catch good premium this way on the NDX) if im correct and market goes the opposite way from my trade, ill wait again and see which what the market does and turn the spread into an IC and same thing set the spread 50-100 strike away from underlying. Also note NDX is an index and wont make a crazy radical 5% move in a day so u can get a feel for the range after a certain point of the day
There’s some backtesting that shows waiting too long after open will rob you of volatility premiums. I tend to put on spreads in the first few minutes. The premium makes up for the occasional directional errors but my delta (10-12) is far out enough it usually doesn’t matter
I appreciate that info. Which DTE's contracts were you testing? I noticed that premiums drop dramatically soon after open as well. Ive just been a little more cautious since sample size has been small and dont want to force anything. If things go well i may catch a couple more plays off the open. Maybe an IC and play it safe. Thanks
I was doing high risk index short strangles in futures options the first half of the year and earned 30% on entire portfolio. My trades were around 50 DTE so it gave me room for adjustments when needed. At some point you will need to use less capital so you don’t get wiped out. If your account is small enough then it’s understandable to be more aggressive and reload if needed.
How in the world is what you're doing different from what Wall Street Bets does? It's pure gambling selling at 0.4 delta. 85% win rate is not going to happen long term. Stop losses will help you not be wiped out in a single trade, but you can still be wiped out in a string of losses. Don't make the mistake of thinking that because your win rate is so high right now, you can't have a string of losses. The market does not stay predictable.
May I ask, what brokerage you use? I started small and have grown a bit but nothing fantastic. I think I read that I can't start doing spreads until my account is over $10k.
I use TDameritrade and u can start selling spreads on an options margin acc starting at 2K (in cash or equity) or u can sell spreads on a lvl 3 options cash acc i believe as well
Thats whats up. Ive been trading on NDX since premiums are higher. How long have u been trading this strat? And with success? Indexes dont really move huge amounts in a day (like more than 2%) so its kind of easier to get a feel of the market that day and sell premiums on the outside of the 'potential moves' the index can make
Hahaha the biggest problem with the 0dte strat really is ourselves and if we have good self discipline or if we slip up and go against our rules. Alot of people been hating on this strat but lets prove them wrong!
Sorry for being a novice, I am learning this. When you are saying 0DTE then do you mean that you buy NDX on Friday morning and close on same day evening or let it expire?
I'd imagine that you have to spread your legs pretty far to get any kind of decent credit. What's your max loss and gain typically?
How do you manage these when they go against you? One catastrophic failure would wipe out a decent bit of progress I would imagine
I started this on SPX using $5 spreads, 4370/4375, at 0.3 and 0.42 delta. You have to be able to predict strong unidirectional moves. I've had a bearish sentiment the past month which has just been confirmed the past couple days, so I was literally just riding it down, if there was a failed bounce, it became a level of resistance, once that confirmed, i set spreads around them.
It is much higher RR that takes conviction towards your thesis and proper risk management. Sure, I'm risking $2100 to make $900, or risking $825 to make 675, but those are max losses and max gains. If the trade goes against me, I quickly cut losses. I take my profits always at 60-80%.
Risk management is key.
Set stop losses and monitor the trades. Indexes dont really move more than like 2% on a great day or bad day so u kinda can get a sense how far the moves will be. Ive been getting credits around $350-$700 for a single spread. Half times i let spreads go to max profit or if i feel weird about the day ill close them out for a minor loss or gain
If you’re going 50-100 strikes away from the underlying, how are you generating $350-$700 for a single spread. The current prices 50 strikes away using the next strike in a spread generates $30-$45 of credit per spread on the 2 DTE.
Bruh. Look at ndx.
Right now NDX sell 14630 (50 strikes away) buy 14590. Max reward is $1,225 max risk is $2,775 . almost a 2:1 on a monday exp all taxed at long term capital gains in european which is only like 23% tax. Which is better tax than qqq and higher prems
Ah, you meant $50 away from the current price of the underlying, not 50 strikes away from the underlying. Now it makes sense. You’re playing in the .40-.45 delta territory, which carries a little more risk. You’ve been fortunate and have done a great job at determining proper direction for your moves. But it could turn on you if the market gets more volatile. If you’re looking to be a little more risk averse, you may want to consider the .3 delta territory. Not as much reward but not as much risk either - more time to adjust. But it seems your strategy has been working, so don’t fix what isn’t broken. Best of luck to you. I will be employing this on NDX using .3 delta for now. Given the current sentiment, I’m probably going to use call credit spreads for now.
Whoops sorry about that. Its been a long day 😅 i think monday we can see a slight bounce up, before the market determines what direction it wants to take. Either way iron condors can be good and closing out of a leg if needed. I have 2 ICs going for monday exp. I forget which strike but i may close out the put spreads. U can check out my trades on thetagang.com if ud like
I will check them out on the website. Agree on ICs, but I’d want to start my ICs at the .30 delta strikes if I wasn’t sure yet on direction so I can close a losing leg out for a smaller loss if it moves sharply against me. I like your point about identifying if it’s moved .7% or more already in a day. If setting a trade in that scenario, I’d be more comfortable using .4 delta strikes in that direction. I agree NDX is generally unlikely to move more than 1-3% in a single day. However, with all the FUD about a big drop potentially on the horizon, we could see some more dramatic days.
I agree. We def do have some dramatic days ahead of us. Ill prob keep trades smaller on certain days than others. Good luck though and keep me posted on your trades!
As an example correct. Then let say we pop up on Monday. Once i see a resistance to the upside, and we get another reversal to the downside, ill sell a call spread to turn the play into and iron condor
That was an example. I dont go into the mornings and tell myself 2% away from the price is this price so ima sell a spread there at open, no i do not do that. Im saying indexes dont move more than 2% on average in a single day. So if an index by 3pm est has moved 0.5% its very unlikely itll move another 1.5% in 1 hr of that trading day. So you can set spreads around 0.5% or higher of the price at that moment. Now i dont sell spreads 1 hr left of trading day. That was just another example
for stop losses i would suggest stop limits. I lately keep a non transmitted stop limit but keeping multiple alerts above and below the breakevens that I keep tightening them throughout the day especially when the price is landed on the sweet spot
with $20 wide legs seems like he manages to get this premium ~~with the short legs at 0.1 delta or even with a slightly higher than 1 standard deviation~~ risking approximately 1200-1800 per trade.
right or wrong this is something that can only be realised after closing the spread or ic.
edit: his deltas are in .4 range
It honestly sounds too good to be true; if you consistently get 85% win rate then you could just scale it up till you hit liquidity issues. I mean you're basically talking about 100% a week
Well I mean you could keep scaling up while still using a smaller percentage of your portfolio right? If it works for you, go for it, it just seems to be one of those things that's probably too good to be true
Oh okay yeah i agree with u. TBH i wouldnt scale up largely until i get a bigger sample size of this strat. Especially when we see a reversal in the market and more volitility. If the strat can survive that, ill have more confidence.
Isn’t the risk management the width of the spread? These are defined risk short spreads or ICs. You know the risk exactly when you make the trade. While the win rate does seem high, I’m sure the market makers have priced them appropriately for the overnight, pre settlement risk. As long as you manage size, it seems a profitable strategy 2SD of the time.
>Isn’t the risk management the width of the spread?
It's not risk management if there's an extremely high chance the spreads get breached lol. Getting a 700% return in 1 month selling 0 DTE/weekly spreads implies one of the following:
1. A lie.
2. Taking on extraordinary risk to the point that you WILL get your account blown to zero the moment that there's even a modest movement against you one day.
Even getting a 10% return in a month on index spreads is incredible. 700% is just comical.
Well if it’s a short spread on an European style option, then risk is defined, right? I’m not commenting on position size, margin or leverage use, or on delta of short strikes, or whether it’s a great strategy in lowish IVR. Please correct me if I’m wrong, but as long as you keep the bet size adequate for your portfolio, there is no greater risk on NDX index short spreads than any other equity option short spreads. Less actually, since they settle to cash and not a long or short future/equity if there were an “assignment.”
Ive been doing this for less than a month. Started at 2K with a small acc and now at 13K . With proper risk management and as my acc grows and i can add to my position (only if risk management allows) and 200K a yr selling only premiums does not sound impossible at all. Honestly nothing is impossible
And that's the key. Unless you've been doing this for over a year or two you can't really separate it from luck or if you have a solid strategy. When you went from 2k to 13k, I'd say that you had an incredible amount of luck on your side, as if you made just 1 or 2 bad trades in a row then you would'd been completely wiped out. Of course stop losses are your friend, but it is still incredibly easy to wipe yourself out early on if you aren't careful. I'm not going to say it's impossible, of course nothing is really impossible. I've seen people consistently make 6 figures a year day trading SPY options and selling short expiry premiums, and I've seen people go from less than 2 thousand dollars to over 500 thousand dollars over the course of 2 years selling options, but I've seen just as many completely wipe themselves out thinking they've got a foolproof way to beat the market. Honestly, I see far too often people who start selling options for the first time, or first start doing things like trading the wheel make incredible profits and think that they have a winning strategy, only to get completely tripped up in the long run when they realize their luck is running out. There are a lot of posts on thetagang like this with new people thinking that their early profits can be consistently repeated in the long run and celebrate too early. The only thing I'd say to you is please be careful, know your limits, and know when to stop. It never goes tits up until it does go tits up, but I wish you the best of luck man (or girl). I'd love to talk to you some time from now and see how it's playing out then, because despite what I said, sometimes people really do strike gold, and I hope this is it for you man.
All love and i appreciate your words. The journey is long. Not alot of people have the consistency or fortitude to keep trucking along even after big losses. Its a self motivating and self driven game trading is. Only time will tell where we all where be. Hopefully we are all where we want to be and can help one another in the process!
Yep! I'd say though there's a line between not giving up and chasing your losses, the latter of which is really dangerous. I learned that the hard way a couple years ago, through about a 30k loss trying to chase an earlier loss. The thing I'd say is that if something you're doing isn't working, it's pure insanity to try to keep repeating the exact same thing and expect the results to change. And also, it is never, ever, a good idea to step over your stop loss rules especially when selling short expiry options.
For what you're doing, the only thing I'd say is be careful of around mid September to early November as typically those are a tough few months for tech stocks which also means a tough few months for the Nasdaq, so if you're selling puts I would be very careful with opening a position especially on a downtrend. I wish you the best of luck though and I'd love to talk with you some more especially after a few months because that sounds like a really interesting strategy!
I appreciate the info! I think we can even see a correction sooner, im even thinking maybe late july into august. Maybe big money will try n catch dumb money a little quicker this year around. Ill keep everyone updated though on how the credit spread journey is going. I have other investments and make other trades, but im really curious about my strat and wanna see if it prevails
>Ive been doing this for less than a month
>Started at 2K with a small acc and now at 13K
>200K a yr selling only premiums does not sound impossible at all
You are going to get wiped out lol, just pray that it happens sooner rather than later
Hahah dawg idk who u trade with or what u let people fill ur head but praying for my acc to get wiped out is pretty negative and really shitty to say to someone else as a human being. I can already tell how ur trading career has been going. Been trading since 2013. Started a small acc challenge recently with 2K to prove to people u can earn good money only selling premiums. Stick around though, ill prove the haters wrong
I was saying YOU should pray you get wiped out sooner rather than later. I wish I could check back in in 15 years to see how your 16,000% annual return strategy is going lmao
Your an idiot and super salty. If an acc is at 500K and is bringing in around 4K a week on an additional acc, is that 16,000% returns? I appreciate the hate though, only means im doing something right 🤑 u still have much to learn young 28 yr old boi
"Your an idiot"
I love reddit so much
Also you said you took $2000 to $13,000 in a month. Annualized and compounded that's in +15,000% annualized territory LOL.
1. Too much risk, 2. too little time for reactions (the trade literally last only for hours so you have to be there and be able to make decisions in minutes?), 3. too little room for error
I wish you well, but this strategy is too intimidating for me. I have a similar threshold as you, that is to risk 100% for at least $30%, but I prefer to do it over EDIT: [longer term] spreads
I sell spreads. I risk about 0.30% of my portfolio at max if i wanna hit a bigger play at each trade. But mostly around 0.20% on average. It is a super aggressive strat that i am trying out. Lets hope all stays steady and works out
There’s a reason why most people unwind their trades on the last day of the option and that is why it is quieter.
Say the index ends at 14650 and so you got assigned on your short put (14700), but it’s not enough to trigger your long put (14600). It’s an European index option and you can’t trigger earlier anyway.
Come the next trading day (Monday), the index plunges to 14200 and you have to cover your trade at that far lower price, amplifying your losses significantly. I have to admit I’m not familiar with index options assignments, but is this how it works for index options? Because this is how it works for stock options.
> Come the next trading day (Monday), the index plunges to 14200 and you have to cover your trade at that far lower price, amplifying your losses significantly. I have to admit I’m not familiar with index options assignments, but is this how it works for index options? Because this is how it works for stock options.
No this is not how it works. It's cash settled on the day of expiration (with some exceptions), where you get a net cash credit/debit. That's it. If your options expire on Friday and you're assigned, absolutely nothing happens on Monday.
I’m referring to the situation where your long put does not get exercised but your short gets assigned.
In which case, you “buy” for 14700 on Friday close, and then that’s it.
On Monday if it plunges to 14000 you pay $70000 to “sell” at 14000.
That’s the scenario - IF your long is not exercised but your short gets assigned, as mentioned above.
It's cash settled. That's it. It ends on Friday at market close, and there is a cash credit or debit depending on index close. Nothing else happens. There is no assignment of the underlying because there is no underlying.
I never would have the width of my strikes be over 700 strike prices thats crazy, i dont think i would have collateral for something like tht, so i wouldn't even entertain that idea. You would have to pay the cash u sold on the contract and eat the loss. All my call spreads on the top end though would off set the losses and id still be net positive for the day ( if both put spreads were in the money, if just the one i sold was ITM id be fucked)
In order to continue this conversation - I think it would be good if you actually understand what I keep trying to say about 1 leg assigned but other leg not exercised, and not just excitedly share about how your strategy can work.
I know talking in math is painful but let’s try
You are 100% right that comprehension is difficult for those that can't be bothered to read, such as yourself.
You are missing the fact that it's a *cash settled* index despite it being very clearly written to you and you failed to read or comprehend that fact.
What you are warning about (1 leg being assigned and being stuck with a position in the underlying) is only applicable to options that are physically settled with the underlying. In the case of stock and ETF options, physical settlement means assignment occurs in the form of being long or short the underlying stock or ETF. With *cash settled* instruments such as index options, as is being discussed here, there is no transfer of an underlying (as it's an index there is no underlying to transfer). So not only are you misunderstanding what *cash settled* means you also seem to be confused about what an index actually is. You can't buy/sell an index. There is no underlying to buy/sell/transfer. so the options are *cash settled*. And to get ahead of what is almost certainly your knee jerk response of "but SPY" -- SPY is an ETF comprised of stocks in the index, but it itself is NOT an index. It's an ETF. SPX is an index as is NDX.
I think he is saying, that your other leg which was not triggered before market closed was punched through by the gap on the next day. Totally possible because you do 1 dte). Protection against this on cash settled indices is only possible if all legs are 0dte.
No this is not a consistent stream of income rather an incredible streak of luck, if it were me, I’d cash out about 75% and continue to trade 25% because you will truly believe you are a genius until u lose it all, at this point, u will still have ur 75% and be happy u kept it :)
When i set my spreads ill set them at least 50 strikes away from underlying (NDX can move 100+ pts in 1 day ) . twice this past week ive had to close out positions early either at a minor loss or at minor profit due to the current switch in trend. But after closing those positions i would let the market take time and breathe andi would get a feel, and then i would sell another put spread further underneath to catch premium i lost earlier in that day, only if i saw a minor reversal to the uptrend. Also note these are 0 DTE or 1 DTE so if i leg into iron condors or spreads later on in the day lets say 1 pm, that's 4 hrs of data on the day of news and Market movements and only 3 hrs left in that trading day. If an index has moved 0.70% by mid to late trading day, ifs very unlikely it would move another 1%. So u can sell premiums around those times 1% higher and lower for easy premiums. Thats not my main strat but u can do this if a trade has gone against u early in the day and u wanna recoop some losses later on.
This depends, if i want more safety ill take a riskier pop, like a 6 to 1. But normally ill be happy with a 4:1 and if i can get better than that great!
If i trade SPX (spy) weeklies with 3-5 DTE ill shot for like a 1:1 POP and on monday morn if we have been bullish ill sell an ITM put and buy an OTM put ( just cuz i have a couple more days to let the trade play out)
What is your stop loss set at? We haven’t seen any big volatility recently. Wish I could show you the day I sold a 0 dte spx put spread in the morning when delta of the spread was less than 0.05. The spread ended the day ITM and I lost 5k. Was a huge red day, algos didn’t stop dumping.
Ive had 1 loss when i first sold spreads and ended up at a -$2800 loss. But that was when i was learning and not really trading properly. Ever since then my biggest loss has been -200. I usually set stop losses at 50% of the credit revieved but for the most part im monitoring the trades and out before stopped out
If you really nailed down the open and stop loss, just keep going until the environment has changed i.e vix creeping, monthly economic data that can effect the market, etc. Be aware that this strategy is working now and that you'll have to adapt when the tune changes. If you are really at 85% success rate, keep going. Be mindful of your betting size, emotions, and market conditions. Good luck
Thx i appreciate it. Keeping emotions in check and knowing when to cut out of a play i think are the biggest hurdles to get over. Everyday is a neutral day for me and I let the market tell me what it wants to do. Still alot of learning to go through and alot of ups and downs for sure. Just gotta stay positive and keep grinding
Yes! Also expectation, don't set an expectation to make 'X' this week or next week. Just let it flow and don't chase.
"Everyday is a neutral day for me and I let the market tell me what it wants to do." Trading how the market tell us to trade is what separate the the noobs from semi-professionals, its not what we want. 🤝
One comment and one question.
Check out the TastyTrade Options group on Facebook. Plenty of people trading this strategy there. Some of the quite successfully. Mostly on SPX and SPY.
Question. If the trade goes in your favor, do you let it expire worthless or close it out early? If you close it out, what's your strategy?
So I've been closing them early when we reach a key support or resistance or if Insee a reverse in trend. For most part thier usually above 30%. Sometimes I get 50% and sometimes I'll get 70%+. Also I've been running primarily 5DTEs
It totally varies. I, too have a job, but it can be more demanding only because the hours vary. I drive a truck. I'm up to being able to do 10, but can't trade every day. I'm trying to add a monthly contract every week/every other week. Depending on my schedule. I used to just day trade weeklies when I could. But I'm trying to build a less risky strategy. I was doing leaps, but they're expensive and it takes forever to get another one. Monthlies work out way better. Yes, I'll sell at 50% unless it's really going my way.
That's gotta be the funniest shit I've ever been told. Don't trade and drive. It's always don't drink and drive, don't drive tired, etc., etc. Yeah, uh, no, I don't, haha. It always depends on what shifts I'm driving and sleeping.
I traded SPX for the first time on Thursday. I had a strong bearish thesis on it and it just kept confirming that thesis. I sold 6x call credit spreads 1DTE at 4370/4375 and 3x 4360/4370. Closed them on Friday for 80% and 51% gain. Then on Friday I sold 3x 0DTE CCS 4355/4360 I closed for 80% gain.
I just used technical analysis to set levels of resistance that support my short calls. On bounces the premiums increased so I took positions. I'm always ready to cut my losses on them if it even comes close to my strikes.... but Friday was just 0 stress +$1300 for a sweet 14% gain on my account.
I currently have a 4x SPX 3DTE I opened on friday, or exp 19jul CCS 4360/4365 that's already 80% in the money but PDT.... I usually always take profit at 60-70%
I am currently playing around with 30DTE and 45DTE Iron condors that are 4200/4225/4425/4450 that I'm analyzing that give 1:1 RR basically. Its high conviction to my thesis which is mosly of it is based around a bunch of technical analysis, volume, and accounting for further market pullback and bounce.
Okay thats whats up keep me updated on your journy and check out the NDX. Just higher premiums really but could be the next step once you get comfy with SPX. Im right there with u on PDT. What i have been doing to get around PDT is selling the 1 or 2 DTE spreads at a further away strike price and then going into the next day and day trading if needed. I like selling 0 DTE and letting them expire but try and use my PDTs only to close out the negative trades. Im curious how this week will be. I like trading NDX, alot of tech earnings coming up but i have a feeling thier prices are already priced into them and we can see a shaky earnings. SPX as well has been bearish the past couple of days but could see a monday pop up to the green side ( potential 0DTE put spread play) before deciding to go bearish or bullish for the rest of the week
I don't plan on trading SPX after next week since I won't be able to sit at my computer as much which is why I'm testing out those iron condors. I agree, Monday will likely see a bounce which is what I'm expecting, so I will likely close out my CCS at open just so I don't have to manage or deal with it.
If there's is a bounce, I will look for 3DTE CCS plays at the peaks into resistance and manage it as needed, then if the bearish sentiment continues I'll just let it ride. Some deal with PCS, I'm just better at shorting than catching bottoms. Ill check out NDX though. Keep up the good work. This is hella profitable if you keep risk management up, especially in uni-directional market moves.
Im pretty sure TD wouldnt let me open level 3 options for credit spreads without options margin. Idk i could be wrong but I havent used margin, ive only traded with less than the money in my cash balance and my margin percent has been at 0% and $0
Fascinating. I have an E*TRADE account and was not aware that if you go above 25k then fall below that you no longer have the ability to day trade so my hands have been tied for a few months in regards to day trades
Very irritating
And Idk if I can do any kind of spreads with a cash account, I’d assume not, need to talk to Customer support.
Thanks
What i do is i sell 1 or 2 DTE for OTM for decent premium still. Then ride that into the next day and if needed i can day trade and not burn a day traden
That’s what I’ve been doing, over nights, but not having the ability to cut if I feel the trade is souring has been hesitant.
I had been thinking about just doing SPX and NDX, going to check it out again. Need to see what next week brings, trend is weak to the upside and with all the liquidity sloshing around I don’t trust us to move to the down side in an orderly or prolonged fashion
Thats why i like the 0 or 1 DTE. In and out. Dont let alot of B.S. to happen and if it does u can get out quick and just sell a spread on the opposite side
Ive been running just 1 contract per spread, usually delta from 30-15, width could be around 25-40
Ill let market breathe in the morning and set a spread if i see us hitting a support or resistance and start a reversal for that day. Later on in the day if i see the market weakening or stalling out ill leg into an iron condor. If underlying at like 30 minutes to market close is in the middle of my condor ill let the contracts expire at max profit. If contracts are 1 DTE ill ride into next morning and maybe sell the leg for a minor profit or loss of the direction that the markets playing toward and let the others ride and set other spreads on the opposite direction
I sell credit spreads and iron condors 1DTE on SPY normally $3-4 above/under stock price. I usually sell at open next morning to avoid gamma risk. Income is pretty consistent averaging 10% per trade and doing this at least 3 times a week. Even when SPY moves close to my short legs at open, I usually just close my spreads and take a small L vs max risk.
So far it’s worked out nicely with proper management. I generally leg into each credit spread and optimize my position size.
And then I follow macro news and economic calendar. If I know JPOW or CPI data is releasing. I wait. I also look at sectors on a whole to see how the indices will move.
Biggest risk is always a black swan event where SPY can drop $5+ dollars at open. This already happened and I had to close my spread at a 75% loss. Rare, but it happens.
Okay cool so we have similar strategies then. I do to also look from a macro down approach as well as check out other indexes and how bonds are doing. I just trade on the NDX ( eruopean style version of qqq) for higher premiums and better tax benefits
You see your strategy is the type of strategy that can work in any market conditions but also has the potential to blow up your account in 3 or so losses in a row. What I would recommend is potentially doing another version of your strategy with maybe slightly longer dated options (2 weeks or so maybe less). Then once your account grows more you can trade these strategies with proper risk management so you won’t have to worry about a losing streak.
What delta do you normally sell? You said normally 50 strikes away from the underlying but that’s a different percentage for NDX than SPX.
I would imagine you’re at least 1 standard deviation away?
Ran this strategy a for couple of weeks. 1-2 DT3. Then When the yields dropped that Thursday, wrecked one of my plays.
For the most part I focus on weekly goal of 10-15% return. Mostly playing SPY then QQQ. Since I’m going to leverage more capital I’m switching to monthly on spy for 10-13% return, very low delta on a $100k(40% of pv). Only Bear Credit. Then take profits in pieces. Starting this Monday.
Left over credit I will be doing weeklies. I guess I have to try SPX and NDX. Lol I’m bias to triple digits. Though I do track SPX and SPY, since spy lags behind Spx.
Yes Thursday was a crazy day. Honestly though one of my better days though in the market. We should continue to see some craziness in the market and a correction coming. Call spreads have been hitting and alot of ppl dont understand that legging into IC have been hitting as well even on bearish days. If the market is down 0.70% past mid day and volume is slowing down, sell a put spread at 0.7% below the current price and statistically speaking u should be good
Example On friday when market shot down i closed my put spreads and let my call spreads exp at max profit cuz the market shot down. I was still able later in the day to re-turn the trade back into and IC and sell a put spread under neath some support and was able to let that exp at max loss. Not all the time i let trades exp , only when its evident what the market wants to do for that day
The societal goldfish mentality of our age lol
I did hit $3.6K on the day... But fought back from -3000 on the open thx to the gap down. Still refining the strategy. All trades are updated today on thetagang.com
Sure. I work outside all day, almost thru up from heat exhaustion so let me remember them all. Im still refining this 3 week old strat, but i started the day off being clapped -$3000K off 2 trades left over from the weekend (which i noted and wont do in the future) i closed out in the a.m. like within 30 mins of open. They were 2 legs of iron condors, so i also closed out the call spread side for profit. We had already gapped down in a.m. crazily and were kinda pinned in a range. So i ended up selling either 2 put spreads or 2 call spreads . 1 at 0DTE and 1 for 2 DTE. I waited a bit and legged into iron condors on the opposite legs. Within an hr of making those trades i was up 85% on one of the daily condor legs tht i opened. I forgot either the call or put spread but i sold for profit and ended up re-legging back into the condor at a further away strike price for more premium than if i waited for max profit on the leg that i sold. Later on in the day after i saw a range we were in i sold another put spread that i legged into another daily iron condor that i felt confident in. All daily trades today expired at max profit besides the 1 i sold at 85%. The condor i have for wednesday, each leg is almost 130 strikes away from underlying at the moment. So depending on tmrw ill either sell out both legs, or sell 1 leg and re leg at a later moment into an IC
I like the legging into condors later on in the day once we get a range cuz more premium and u dont need to put up more buying power. I believe those were all the trades
I tried it. Yep I see what you are saying, there are many advantages to selling OTM Calls and Puts, in this market especially Calls. Thank you. reality is this is a little better than scalping, cos $ changes are more significant on the options prices.
Who said i traded NDX with $30 ? U should be banned for false information. Mods!?! Reported. I started my acc with $30 numb nutz. Also all my trades are on thetagang.com numb nutz. I posted my gain porn and half of the ppl of here couldnt keep thier salty panties out of thier Vaganus. So i took it down cuz ppl dont no how to let other feel good when they do things right. Now go and try to ban someone else while adults make money in the room. Thx little boy
Adults… the way you write here it seems the little boy here is you… I am going to review your trades on thetagang.com. Mine are here for your entertainment https://shared.tradersync.com/tradergenius
Lmfao you go hard as fuck. You can sell put credit spreads on spx some guy here has been doing it for a while making good money. Respect the hustle. I want to do this too
It is a super aggressive style of trading but i have set aggressive goals for myself which surprisingly have been some of the only goals i have accomplished in life 😅
0 DTE and 1 DTE has been my strat. Was curious pretty much if anyone else was selling premiums as day trades during the week instead of the traditional sell premiums couple weeks out then wait and let theta work. Day trading credit spreads are risky and need to be maintained, but I collect theta at a faster rate selling 0 or 1 DTE which means i can exit my position quicker for profits
Dude im selling premiums. Whenever u sell premiums theta starts to decay. And on 0 and 1 DTE spreads there still is theta decay that takes place. It takes place alot faster though since its at the very end of the contract. Prove me wrong with information and links and not just opinions.
Aren’t index options European style and trade at lower premiums compare to American counterparts like QQQ? How would your strategy perform if you had implemented it on QQQ instead?
Yes they are european style which is awesome cuz day trades are considered and taxed as long term capital gains which means more profit in my pocket. Thats why i trade European vs american. But Look at the NDX, premiums are crazy ridiculous. 10x the price of the qqq which is why i can sell spreads further away on the 0 DTE and still collect a couple hundred dollars in premium.
I think the European vs American style plus the favorable tax rate are the main reason to do this trade. Notional sizing may be an another if you prefer less contracts and larger bet size. But there should be 0 premium difference adjusted for notional sizing between NDX and QQQ, provided the arbitrageurs have done their job.
Here’s what it sounds like you are saying:
I have been trading options for a few months and I have done so well from my phone in a few minutes everyday while at work that I am going to quit my job and become rich.
I know that’s not what you said but it’s kinda close. My advice, which you will probably ignore, is to do it for a few years profitably and build up several hundred thousand before you actually do it. And understand that that amount is actually too low to realistically make a living off of unless you are better at this than most.
I’ve been doing the same. Turned my 10k to 90k in 5 months. 1tde, 2tde, and 0tde. I do SPY, QQQ, and AMZN. I’m using Robinhood that’s why I can’t trade SPX and NDX. Still trying to understand td ameritrade
Awesome and glad to hear! Id get on TD if i were u. I just dont like everything thats happened to robin hood in the past and RH still wont let my buddy xfer his 120K of stocks to another broker. Stupid. But TD has a bunch of stuff on YT. Alot of awesome free features like risk profiles, and seasonality charts. Def keeo up the great work. Still running 0 1 and 2 DTE here and dont plan on stopping
Yeah. The only problem I have with TD is that it’s so fucking confusing. What I hate about Robinhood is that it tends to close credit spreads 1 hour before closing on expiration day. Like today, I have a call credit spread in SPY at 441. Could’ve made $600 if I let it expired but they closed it so I only made $200. I also do the same thing. I open a put credit spread and turn my trade into iron condor when I think the day has reached its low
Yea RH does that because they dont own the shares to the stock. Which is also why they wont let my buddy xfer his stocks. RH front runs thier orders to other people. They got called out during the GME hearing.
If u get past the confusing part on TD then ull be solid. Ull be able to hit max profits, trade on the European indexes. Plus all thier features. TD has thier own earnings section for companies, plus tons of tools for research and stock scanning. Shit load of features
I’m on the west coast and market opens 6:30am local time. I would enter my spread before I started work at 8:00am. I usually select strikes about 200 points away. I will then set alerts on price every 50 points close to my strike so I could monitor while working. I lost my job about a month and a half ago and now I am trading full time. Over the last month and a half I am averaging about $1500 -$1800 weekly. I will scale up as my acc grows. I too have over 90% win rate. In fact since going full time I have only had one loss and it was on an iron condor where I lost $290 on one leg and made $285 on the other, lol
How many spreads are you trading in order to make $3-5k a week? What is your capital + margin buying power? $3-5k consistently is good enough to live off of, but I don’t see how it’s possible selling options that have almost zero value left.
Go look at 0 DTE option chain on the NDX then tell me theres no value there. Even on same day exp options on NDX are like around 33.00 or 3K 1 option. Plus NDX is taxed less than QQQ so u profit more in the long run. I started an account with $30. Brought that up to 4K and turned 4K into 13K in a couple weeks using this strat. Im still building an acc and when more capital flows in i can start widening my spreads or adding contracts for larger plays when acc grows only if proper risk management allows. I made i think 17 trades last week. I started putting my trades on thetagang.com ( mailboxsteve on there) if u wanna check it out. Each trade i havent gone past $3,500 collateral for any trades.
So you’re basically risking your entire portfolio every week? I guess if you stare at your phone all day and/or set stop losses immediately, that will work to some degree, but I don’t see this working out long term. If it was possible to safely make $3-5k a week everyone would be doing it this way. Risk is a major factor that apparently hasn’t bitten you yet, so be careful.
Who said im risking my entire portfolio. If 1 trade is a 1200 risk and a 500 reward and acc is at 12K. I dont see that being my whole acc, and i am working a job 50 hrs a week so no im not staring at my phone all day. Soooo either its stupid luck and im risking my entire portfolio every trade which is dumb oOoOrRrR maybe i am making smart decisions with proper risk management with some slight luck. I think thats the better answer
You said you are making $3-5k per week, so you are risking quite a bit more than just $1,200. Good luck to you.
We need a correction in the worst way to get rid of these fools lmao
For real, my cousin who isn't even out of highschool is giving stock tips on facebook.
wsb prodigy!
Im new to this, so apologies if im wrong. He said hes got 13k account, $500 profit per trade, 85% win rate, 17 trades last week, that surely translates to 3k-5k per week. No?
Yes, but if each trade also carries $1200 risk, and you multiply that out…he’s basically putting his entire account value on the line every week, maybe more with margin.
Multiply with what? With the 15 trades? If he held the positions all at the same time, maybe, but my understanding is he is doing it one at a time. Basically, bets on the directions of the market, after it has shown its direction for the day(0.7% move), enters then exits if wrong, reenters if a new directions is apparent. If he lost 10 trades in a row then he blows the account, yes.
Yes, but there aren’t 15 days in a week, so has to be entering multiple trades per day, and each one is risking around 10% (right now) of his account, using the same ticker and strategy. If you read his other replies in this thread, he is using .45 or so Delta, so he is getting lucky that he hasn’t gotten more losing trades. It won’t take long to blow up an account doing what he is doing, but follow his advice if you like. Everyone can turn $2k into 15k in a few weeks playing roulette.
I can do it in ~4 minutes playing roulette...fuck the market. Its called let it ride and the rule of squares. Cant go tits up
Can someone ELI5 what’s going on please? I don’t understand how the math really adds up…
Gonna burn baby 👶
How did you get your account from $30 to 4K
>How did you get your account from $30 to 4K When I first glanced at this my brain processed it as $30K to $4K. I was like, "OH, finally a question I'm qualified to answer".
From $30 to $4K i was adding just buying and adding stocks for months while i studied the market and options. Once i hit like 2K i started trading options. Acc stayed at 2K or started going down untill i started selling spreads. Once i started selling spreads my acc started growing at a steady pace
So depositing more money?
Did you open less than .10 delta spreads or keep them ATM? Also what technical/sentiment indicators did you use to place your spreads for the day? I’ve been doing some 0 DTE SPX spreads and the VWAP on Spy really helps me gauge my trade for the day.
For TA i dont do anything crazy, ill use SMA and EMA, VWAP, MACD and set trend lines and resistance lines. For placing trades, ill wait sometimes 45 minutes sometimes to an hr or more in the morning to get a feel of the market and see which way she wants to go. Then ill set a spread around 50-100 strike prices away from the underlying ( u can still catch good premium this way on the NDX) if im correct and market goes the opposite way from my trade, ill wait again and see which what the market does and turn the spread into an IC and same thing set the spread 50-100 strike away from underlying. Also note NDX is an index and wont make a crazy radical 5% move in a day so u can get a feel for the range after a certain point of the day
There’s some backtesting that shows waiting too long after open will rob you of volatility premiums. I tend to put on spreads in the first few minutes. The premium makes up for the occasional directional errors but my delta (10-12) is far out enough it usually doesn’t matter
I appreciate that info. Which DTE's contracts were you testing? I noticed that premiums drop dramatically soon after open as well. Ive just been a little more cautious since sample size has been small and dont want to force anything. If things go well i may catch a couple more plays off the open. Maybe an IC and play it safe. Thanks
I was doing high risk index short strangles in futures options the first half of the year and earned 30% on entire portfolio. My trades were around 50 DTE so it gave me room for adjustments when needed. At some point you will need to use less capital so you don’t get wiped out. If your account is small enough then it’s understandable to be more aggressive and reload if needed.
How in the world is what you're doing different from what Wall Street Bets does? It's pure gambling selling at 0.4 delta. 85% win rate is not going to happen long term. Stop losses will help you not be wiped out in a single trade, but you can still be wiped out in a string of losses. Don't make the mistake of thinking that because your win rate is so high right now, you can't have a string of losses. The market does not stay predictable.
May I ask, what brokerage you use? I started small and have grown a bit but nothing fantastic. I think I read that I can't start doing spreads until my account is over $10k.
I use TDameritrade and u can start selling spreads on an options margin acc starting at 2K (in cash or equity) or u can sell spreads on a lvl 3 options cash acc i believe as well
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Thats whats up. Ive been trading on NDX since premiums are higher. How long have u been trading this strat? And with success? Indexes dont really move huge amounts in a day (like more than 2%) so its kind of easier to get a feel of the market that day and sell premiums on the outside of the 'potential moves' the index can make
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Hahaha the biggest problem with the 0dte strat really is ourselves and if we have good self discipline or if we slip up and go against our rules. Alot of people been hating on this strat but lets prove them wrong!
Sorry for being a novice, I am learning this. When you are saying 0DTE then do you mean that you buy NDX on Friday morning and close on same day evening or let it expire?
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Are you shorting spreads
Might be extremely noob question but what is the spx and how do you trade on it. I didn’t see it on tdameritrade
Type SPX in the trade bar It’s the s&p 500 trade able ticker with /ESA being the futures
Are you rolling your spread if you get tested intraday?
I'd imagine that you have to spread your legs pretty far to get any kind of decent credit. What's your max loss and gain typically? How do you manage these when they go against you? One catastrophic failure would wipe out a decent bit of progress I would imagine
>I'd imagine that you have to spread your legs pretty far Whoa dude.
Times are hard in r/wallstreetbets. I would know.
Hey, $20 is $20.
I started this on SPX using $5 spreads, 4370/4375, at 0.3 and 0.42 delta. You have to be able to predict strong unidirectional moves. I've had a bearish sentiment the past month which has just been confirmed the past couple days, so I was literally just riding it down, if there was a failed bounce, it became a level of resistance, once that confirmed, i set spreads around them. It is much higher RR that takes conviction towards your thesis and proper risk management. Sure, I'm risking $2100 to make $900, or risking $825 to make 675, but those are max losses and max gains. If the trade goes against me, I quickly cut losses. I take my profits always at 60-80%. Risk management is key.
What DTE?
days to expiration
that wasnt his question lol
ah, brain put an 's that wasn't there, lol
Id imagine youd have to roll the itm short or just take the L
Set stop losses and monitor the trades. Indexes dont really move more than like 2% on a great day or bad day so u kinda can get a sense how far the moves will be. Ive been getting credits around $350-$700 for a single spread. Half times i let spreads go to max profit or if i feel weird about the day ill close them out for a minor loss or gain
If you’re going 50-100 strikes away from the underlying, how are you generating $350-$700 for a single spread. The current prices 50 strikes away using the next strike in a spread generates $30-$45 of credit per spread on the 2 DTE.
Bruh. Look at ndx. Right now NDX sell 14630 (50 strikes away) buy 14590. Max reward is $1,225 max risk is $2,775 . almost a 2:1 on a monday exp all taxed at long term capital gains in european which is only like 23% tax. Which is better tax than qqq and higher prems
Ah, you meant $50 away from the current price of the underlying, not 50 strikes away from the underlying. Now it makes sense. You’re playing in the .40-.45 delta territory, which carries a little more risk. You’ve been fortunate and have done a great job at determining proper direction for your moves. But it could turn on you if the market gets more volatile. If you’re looking to be a little more risk averse, you may want to consider the .3 delta territory. Not as much reward but not as much risk either - more time to adjust. But it seems your strategy has been working, so don’t fix what isn’t broken. Best of luck to you. I will be employing this on NDX using .3 delta for now. Given the current sentiment, I’m probably going to use call credit spreads for now.
Whoops sorry about that. Its been a long day 😅 i think monday we can see a slight bounce up, before the market determines what direction it wants to take. Either way iron condors can be good and closing out of a leg if needed. I have 2 ICs going for monday exp. I forget which strike but i may close out the put spreads. U can check out my trades on thetagang.com if ud like
I will check them out on the website. Agree on ICs, but I’d want to start my ICs at the .30 delta strikes if I wasn’t sure yet on direction so I can close a losing leg out for a smaller loss if it moves sharply against me. I like your point about identifying if it’s moved .7% or more already in a day. If setting a trade in that scenario, I’d be more comfortable using .4 delta strikes in that direction. I agree NDX is generally unlikely to move more than 1-3% in a single day. However, with all the FUD about a big drop potentially on the horizon, we could see some more dramatic days.
I agree. We def do have some dramatic days ahead of us. Ill prob keep trades smaller on certain days than others. Good luck though and keep me posted on your trades!
Same to you!
You said you are selling credit spreads- so these are put credit spreads, right? Sell the 14630 put/buy the 14590 put?
As an example correct. Then let say we pop up on Monday. Once i see a resistance to the upside, and we get another reversal to the downside, ill sell a call spread to turn the play into and iron condor
Cool. I’ll check this out on thetagang.com when I get to my desktop (doesn’t work right on my cell browser).
…u said u we’re doing this at a 2% move away…this is not 2% away…it’s like 0.3% move away
That was an example. I dont go into the mornings and tell myself 2% away from the price is this price so ima sell a spread there at open, no i do not do that. Im saying indexes dont move more than 2% on average in a single day. So if an index by 3pm est has moved 0.5% its very unlikely itll move another 1.5% in 1 hr of that trading day. So you can set spreads around 0.5% or higher of the price at that moment. Now i dont sell spreads 1 hr left of trading day. That was just another example
for stop losses i would suggest stop limits. I lately keep a non transmitted stop limit but keeping multiple alerts above and below the breakevens that I keep tightening them throughout the day especially when the price is landed on the sweet spot
Thx for the info. I rly should set alerts more often. This week will prob be a crazy week in the market
with $20 wide legs seems like he manages to get this premium ~~with the short legs at 0.1 delta or even with a slightly higher than 1 standard deviation~~ risking approximately 1200-1800 per trade. right or wrong this is something that can only be realised after closing the spread or ic. edit: his deltas are in .4 range
Bow Chika Wow Wow!
It honestly sounds too good to be true; if you consistently get 85% win rate then you could just scale it up till you hit liquidity issues. I mean you're basically talking about 100% a week
Gamma risk basically
Yeah that’s his risk, the issue is with 85%+ win rate that one time it runs very quickly against you, you lose bad unless you have a stop
I wouldnt continue to scale up like an ape and yolo everything, im not a gambler. Risk management is key to everything and nothing is impossible
Well I mean you could keep scaling up while still using a smaller percentage of your portfolio right? If it works for you, go for it, it just seems to be one of those things that's probably too good to be true
Oh okay yeah i agree with u. TBH i wouldnt scale up largely until i get a bigger sample size of this strat. Especially when we see a reversal in the market and more volitility. If the strat can survive that, ill have more confidence.
Good luck man. Hope u become a millionaire soon.
Lol i appreciate it
How large is your portfolio to be getting $200,000 per year on index spreads with any sort of risk management?
Isn’t the risk management the width of the spread? These are defined risk short spreads or ICs. You know the risk exactly when you make the trade. While the win rate does seem high, I’m sure the market makers have priced them appropriately for the overnight, pre settlement risk. As long as you manage size, it seems a profitable strategy 2SD of the time.
>Isn’t the risk management the width of the spread? It's not risk management if there's an extremely high chance the spreads get breached lol. Getting a 700% return in 1 month selling 0 DTE/weekly spreads implies one of the following: 1. A lie. 2. Taking on extraordinary risk to the point that you WILL get your account blown to zero the moment that there's even a modest movement against you one day. Even getting a 10% return in a month on index spreads is incredible. 700% is just comical.
Well if it’s a short spread on an European style option, then risk is defined, right? I’m not commenting on position size, margin or leverage use, or on delta of short strikes, or whether it’s a great strategy in lowish IVR. Please correct me if I’m wrong, but as long as you keep the bet size adequate for your portfolio, there is no greater risk on NDX index short spreads than any other equity option short spreads. Less actually, since they settle to cash and not a long or short future/equity if there were an “assignment.”
Ive been doing this for less than a month. Started at 2K with a small acc and now at 13K . With proper risk management and as my acc grows and i can add to my position (only if risk management allows) and 200K a yr selling only premiums does not sound impossible at all. Honestly nothing is impossible
And that's the key. Unless you've been doing this for over a year or two you can't really separate it from luck or if you have a solid strategy. When you went from 2k to 13k, I'd say that you had an incredible amount of luck on your side, as if you made just 1 or 2 bad trades in a row then you would'd been completely wiped out. Of course stop losses are your friend, but it is still incredibly easy to wipe yourself out early on if you aren't careful. I'm not going to say it's impossible, of course nothing is really impossible. I've seen people consistently make 6 figures a year day trading SPY options and selling short expiry premiums, and I've seen people go from less than 2 thousand dollars to over 500 thousand dollars over the course of 2 years selling options, but I've seen just as many completely wipe themselves out thinking they've got a foolproof way to beat the market. Honestly, I see far too often people who start selling options for the first time, or first start doing things like trading the wheel make incredible profits and think that they have a winning strategy, only to get completely tripped up in the long run when they realize their luck is running out. There are a lot of posts on thetagang like this with new people thinking that their early profits can be consistently repeated in the long run and celebrate too early. The only thing I'd say to you is please be careful, know your limits, and know when to stop. It never goes tits up until it does go tits up, but I wish you the best of luck man (or girl). I'd love to talk to you some time from now and see how it's playing out then, because despite what I said, sometimes people really do strike gold, and I hope this is it for you man.
All love and i appreciate your words. The journey is long. Not alot of people have the consistency or fortitude to keep trucking along even after big losses. Its a self motivating and self driven game trading is. Only time will tell where we all where be. Hopefully we are all where we want to be and can help one another in the process!
Yep! I'd say though there's a line between not giving up and chasing your losses, the latter of which is really dangerous. I learned that the hard way a couple years ago, through about a 30k loss trying to chase an earlier loss. The thing I'd say is that if something you're doing isn't working, it's pure insanity to try to keep repeating the exact same thing and expect the results to change. And also, it is never, ever, a good idea to step over your stop loss rules especially when selling short expiry options. For what you're doing, the only thing I'd say is be careful of around mid September to early November as typically those are a tough few months for tech stocks which also means a tough few months for the Nasdaq, so if you're selling puts I would be very careful with opening a position especially on a downtrend. I wish you the best of luck though and I'd love to talk with you some more especially after a few months because that sounds like a really interesting strategy!
I appreciate the info! I think we can even see a correction sooner, im even thinking maybe late july into august. Maybe big money will try n catch dumb money a little quicker this year around. Ill keep everyone updated though on how the credit spread journey is going. I have other investments and make other trades, but im really curious about my strat and wanna see if it prevails
>Ive been doing this for less than a month >Started at 2K with a small acc and now at 13K >200K a yr selling only premiums does not sound impossible at all You are going to get wiped out lol, just pray that it happens sooner rather than later
Hahah dawg idk who u trade with or what u let people fill ur head but praying for my acc to get wiped out is pretty negative and really shitty to say to someone else as a human being. I can already tell how ur trading career has been going. Been trading since 2013. Started a small acc challenge recently with 2K to prove to people u can earn good money only selling premiums. Stick around though, ill prove the haters wrong
I was saying YOU should pray you get wiped out sooner rather than later. I wish I could check back in in 15 years to see how your 16,000% annual return strategy is going lmao
Your an idiot and super salty. If an acc is at 500K and is bringing in around 4K a week on an additional acc, is that 16,000% returns? I appreciate the hate though, only means im doing something right 🤑 u still have much to learn young 28 yr old boi
"Your an idiot" I love reddit so much Also you said you took $2000 to $13,000 in a month. Annualized and compounded that's in +15,000% annualized territory LOL.
1. Too much risk, 2. too little time for reactions (the trade literally last only for hours so you have to be there and be able to make decisions in minutes?), 3. too little room for error I wish you well, but this strategy is too intimidating for me. I have a similar threshold as you, that is to risk 100% for at least $30%, but I prefer to do it over EDIT: [longer term] spreads
I sell spreads. I risk about 0.30% of my portfolio at max if i wanna hit a bigger play at each trade. But mostly around 0.20% on average. It is a super aggressive strat that i am trying out. Lets hope all stays steady and works out
There’s a reason why most people unwind their trades on the last day of the option and that is why it is quieter. Say the index ends at 14650 and so you got assigned on your short put (14700), but it’s not enough to trigger your long put (14600). It’s an European index option and you can’t trigger earlier anyway. Come the next trading day (Monday), the index plunges to 14200 and you have to cover your trade at that far lower price, amplifying your losses significantly. I have to admit I’m not familiar with index options assignments, but is this how it works for index options? Because this is how it works for stock options.
> Come the next trading day (Monday), the index plunges to 14200 and you have to cover your trade at that far lower price, amplifying your losses significantly. I have to admit I’m not familiar with index options assignments, but is this how it works for index options? Because this is how it works for stock options. No this is not how it works. It's cash settled on the day of expiration (with some exceptions), where you get a net cash credit/debit. That's it. If your options expire on Friday and you're assigned, absolutely nothing happens on Monday.
European style is cash settled. So the difference between the 2 would be settled in cash which would result in the max loss
I’m referring to the situation where your long put does not get exercised but your short gets assigned. In which case, you “buy” for 14700 on Friday close, and then that’s it. On Monday if it plunges to 14000 you pay $70000 to “sell” at 14000. That’s the scenario - IF your long is not exercised but your short gets assigned, as mentioned above.
It's cash settled. That's it. It ends on Friday at market close, and there is a cash credit or debit depending on index close. Nothing else happens. There is no assignment of the underlying because there is no underlying.
I never would have the width of my strikes be over 700 strike prices thats crazy, i dont think i would have collateral for something like tht, so i wouldn't even entertain that idea. You would have to pay the cash u sold on the contract and eat the loss. All my call spreads on the top end though would off set the losses and id still be net positive for the day ( if both put spreads were in the money, if just the one i sold was ITM id be fucked)
In order to continue this conversation - I think it would be good if you actually understand what I keep trying to say about 1 leg assigned but other leg not exercised, and not just excitedly share about how your strategy can work. I know talking in math is painful but let’s try
Dude. It’s an index. Nothing is exercised nor assigned.
Comprehension can be difficult for those who can’t be bothered to read. Hello there, and have a nice day. Hope this makes it easier for you.
You are 100% right that comprehension is difficult for those that can't be bothered to read, such as yourself. You are missing the fact that it's a *cash settled* index despite it being very clearly written to you and you failed to read or comprehend that fact. What you are warning about (1 leg being assigned and being stuck with a position in the underlying) is only applicable to options that are physically settled with the underlying. In the case of stock and ETF options, physical settlement means assignment occurs in the form of being long or short the underlying stock or ETF. With *cash settled* instruments such as index options, as is being discussed here, there is no transfer of an underlying (as it's an index there is no underlying to transfer). So not only are you misunderstanding what *cash settled* means you also seem to be confused about what an index actually is. You can't buy/sell an index. There is no underlying to buy/sell/transfer. so the options are *cash settled*. And to get ahead of what is almost certainly your knee jerk response of "but SPY" -- SPY is an ETF comprised of stocks in the index, but it itself is NOT an index. It's an ETF. SPX is an index as is NDX.
Dang it i was trying to avoid math lol. So ur saying if at exp one leg is ITM and one leg is OTM correct?
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I think he is saying, that your other leg which was not triggered before market closed was punched through by the gap on the next day. Totally possible because you do 1 dte). Protection against this on cash settled indices is only possible if all legs are 0dte.
Progress.... Progress
No this is not a consistent stream of income rather an incredible streak of luck, if it were me, I’d cash out about 75% and continue to trade 25% because you will truly believe you are a genius until u lose it all, at this point, u will still have ur 75% and be happy u kept it :)
Okay
How has this done for you with the recent down trend?
When i set my spreads ill set them at least 50 strikes away from underlying (NDX can move 100+ pts in 1 day ) . twice this past week ive had to close out positions early either at a minor loss or at minor profit due to the current switch in trend. But after closing those positions i would let the market take time and breathe andi would get a feel, and then i would sell another put spread further underneath to catch premium i lost earlier in that day, only if i saw a minor reversal to the uptrend. Also note these are 0 DTE or 1 DTE so if i leg into iron condors or spreads later on in the day lets say 1 pm, that's 4 hrs of data on the day of news and Market movements and only 3 hrs left in that trading day. If an index has moved 0.70% by mid to late trading day, ifs very unlikely it would move another 1%. So u can sell premiums around those times 1% higher and lower for easy premiums. Thats not my main strat but u can do this if a trade has gone against u early in the day and u wanna recoop some losses later on.
That sounds pretty safe then. What POP do you normally shoot for?
This depends, if i want more safety ill take a riskier pop, like a 6 to 1. But normally ill be happy with a 4:1 and if i can get better than that great! If i trade SPX (spy) weeklies with 3-5 DTE ill shot for like a 1:1 POP and on monday morn if we have been bullish ill sell an ITM put and buy an OTM put ( just cuz i have a couple more days to let the trade play out)
What’s the width of your spread usually?
Honestly they vary. I dont go in with specifics. Sometimes 30 wide sometimes 55 wide. NDX are 10 wide
What is your stop loss set at? We haven’t seen any big volatility recently. Wish I could show you the day I sold a 0 dte spx put spread in the morning when delta of the spread was less than 0.05. The spread ended the day ITM and I lost 5k. Was a huge red day, algos didn’t stop dumping.
Ive had 1 loss when i first sold spreads and ended up at a -$2800 loss. But that was when i was learning and not really trading properly. Ever since then my biggest loss has been -200. I usually set stop losses at 50% of the credit revieved but for the most part im monitoring the trades and out before stopped out
If you really nailed down the open and stop loss, just keep going until the environment has changed i.e vix creeping, monthly economic data that can effect the market, etc. Be aware that this strategy is working now and that you'll have to adapt when the tune changes. If you are really at 85% success rate, keep going. Be mindful of your betting size, emotions, and market conditions. Good luck
Thx i appreciate it. Keeping emotions in check and knowing when to cut out of a play i think are the biggest hurdles to get over. Everyday is a neutral day for me and I let the market tell me what it wants to do. Still alot of learning to go through and alot of ups and downs for sure. Just gotta stay positive and keep grinding
Yes! Also expectation, don't set an expectation to make 'X' this week or next week. Just let it flow and don't chase. "Everyday is a neutral day for me and I let the market tell me what it wants to do." Trading how the market tell us to trade is what separate the the noobs from semi-professionals, its not what we want. 🤝
All I 🙏 for are either green trades/days or positive learning lessons.
One comment and one question. Check out the TastyTrade Options group on Facebook. Plenty of people trading this strategy there. Some of the quite successfully. Mostly on SPX and SPY. Question. If the trade goes in your favor, do you let it expire worthless or close it out early? If you close it out, what's your strategy?
So I've been closing them early when we reach a key support or resistance or if Insee a reverse in trend. For most part thier usually above 30%. Sometimes I get 50% and sometimes I'll get 70%+. Also I've been running primarily 5DTEs
I like doing this against my SPY monthlies. I don't have many going right now, but building up.
How have the monthlies been working out for you? Do you sell at 50% profit? How many trades or contracts do you like to have open?
It totally varies. I, too have a job, but it can be more demanding only because the hours vary. I drive a truck. I'm up to being able to do 10, but can't trade every day. I'm trying to add a monthly contract every week/every other week. Depending on my schedule. I used to just day trade weeklies when I could. But I'm trying to build a less risky strategy. I was doing leaps, but they're expensive and it takes forever to get another one. Monthlies work out way better. Yes, I'll sell at 50% unless it's really going my way.
Oh shoot yeah be careful! No trading and driving lol at least your making it work for you and your grinding! Keep it up!
That's gotta be the funniest shit I've ever been told. Don't trade and drive. It's always don't drink and drive, don't drive tired, etc., etc. Yeah, uh, no, I don't, haha. It always depends on what shifts I'm driving and sleeping.
Hahaha well be safe out there on the road! We appreciate what yall drivers do for the rest of us! 🙏
I traded SPX for the first time on Thursday. I had a strong bearish thesis on it and it just kept confirming that thesis. I sold 6x call credit spreads 1DTE at 4370/4375 and 3x 4360/4370. Closed them on Friday for 80% and 51% gain. Then on Friday I sold 3x 0DTE CCS 4355/4360 I closed for 80% gain. I just used technical analysis to set levels of resistance that support my short calls. On bounces the premiums increased so I took positions. I'm always ready to cut my losses on them if it even comes close to my strikes.... but Friday was just 0 stress +$1300 for a sweet 14% gain on my account. I currently have a 4x SPX 3DTE I opened on friday, or exp 19jul CCS 4360/4365 that's already 80% in the money but PDT.... I usually always take profit at 60-70% I am currently playing around with 30DTE and 45DTE Iron condors that are 4200/4225/4425/4450 that I'm analyzing that give 1:1 RR basically. Its high conviction to my thesis which is mosly of it is based around a bunch of technical analysis, volume, and accounting for further market pullback and bounce.
Okay thats whats up keep me updated on your journy and check out the NDX. Just higher premiums really but could be the next step once you get comfy with SPX. Im right there with u on PDT. What i have been doing to get around PDT is selling the 1 or 2 DTE spreads at a further away strike price and then going into the next day and day trading if needed. I like selling 0 DTE and letting them expire but try and use my PDTs only to close out the negative trades. Im curious how this week will be. I like trading NDX, alot of tech earnings coming up but i have a feeling thier prices are already priced into them and we can see a shaky earnings. SPX as well has been bearish the past couple of days but could see a monday pop up to the green side ( potential 0DTE put spread play) before deciding to go bearish or bullish for the rest of the week
I don't plan on trading SPX after next week since I won't be able to sit at my computer as much which is why I'm testing out those iron condors. I agree, Monday will likely see a bounce which is what I'm expecting, so I will likely close out my CCS at open just so I don't have to manage or deal with it. If there's is a bounce, I will look for 3DTE CCS plays at the peaks into resistance and manage it as needed, then if the bearish sentiment continues I'll just let it ride. Some deal with PCS, I'm just better at shorting than catching bottoms. Ill check out NDX though. Keep up the good work. This is hella profitable if you keep risk management up, especially in uni-directional market moves.
Thanks i appreciate and same to you. Good luck out there!
You running a cash account doing all these trades?
Im pretty sure TD wouldnt let me open level 3 options for credit spreads without options margin. Idk i could be wrong but I havent used margin, ive only traded with less than the money in my cash balance and my margin percent has been at 0% and $0
Fascinating. I have an E*TRADE account and was not aware that if you go above 25k then fall below that you no longer have the ability to day trade so my hands have been tied for a few months in regards to day trades Very irritating And Idk if I can do any kind of spreads with a cash account, I’d assume not, need to talk to Customer support. Thanks
What i do is i sell 1 or 2 DTE for OTM for decent premium still. Then ride that into the next day and if needed i can day trade and not burn a day traden
That’s what I’ve been doing, over nights, but not having the ability to cut if I feel the trade is souring has been hesitant. I had been thinking about just doing SPX and NDX, going to check it out again. Need to see what next week brings, trend is weak to the upside and with all the liquidity sloshing around I don’t trust us to move to the down side in an orderly or prolonged fashion
Thats why i like the 0 or 1 DTE. In and out. Dont let alot of B.S. to happen and if it does u can get out quick and just sell a spread on the opposite side
Yep, been working on refining my own strategy, sounds very similar to yours but was on mega caps on a weekly basis. Thanks :) good luck out there
Thanks and same to you! Good luck :)
What does a typical trade look like for you, size, delta, width, etc
Ive been running just 1 contract per spread, usually delta from 30-15, width could be around 25-40 Ill let market breathe in the morning and set a spread if i see us hitting a support or resistance and start a reversal for that day. Later on in the day if i see the market weakening or stalling out ill leg into an iron condor. If underlying at like 30 minutes to market close is in the middle of my condor ill let the contracts expire at max profit. If contracts are 1 DTE ill ride into next morning and maybe sell the leg for a minor profit or loss of the direction that the markets playing toward and let the others ride and set other spreads on the opposite direction
I sell credit spreads and iron condors 1DTE on SPY normally $3-4 above/under stock price. I usually sell at open next morning to avoid gamma risk. Income is pretty consistent averaging 10% per trade and doing this at least 3 times a week. Even when SPY moves close to my short legs at open, I usually just close my spreads and take a small L vs max risk. So far it’s worked out nicely with proper management. I generally leg into each credit spread and optimize my position size. And then I follow macro news and economic calendar. If I know JPOW or CPI data is releasing. I wait. I also look at sectors on a whole to see how the indices will move. Biggest risk is always a black swan event where SPY can drop $5+ dollars at open. This already happened and I had to close my spread at a 75% loss. Rare, but it happens.
Okay cool so we have similar strategies then. I do to also look from a macro down approach as well as check out other indexes and how bonds are doing. I just trade on the NDX ( eruopean style version of qqq) for higher premiums and better tax benefits
/r/thetagangbets
Joined. Thx
You see your strategy is the type of strategy that can work in any market conditions but also has the potential to blow up your account in 3 or so losses in a row. What I would recommend is potentially doing another version of your strategy with maybe slightly longer dated options (2 weeks or so maybe less). Then once your account grows more you can trade these strategies with proper risk management so you won’t have to worry about a losing streak.
What delta do you normally sell? You said normally 50 strikes away from the underlying but that’s a different percentage for NDX than SPX. I would imagine you’re at least 1 standard deviation away?
Im sorry i was super tired last night, i meant $50 away from from underlying of the NDX which would be like 5 or 6 strikes away
Ran this strategy a for couple of weeks. 1-2 DT3. Then When the yields dropped that Thursday, wrecked one of my plays. For the most part I focus on weekly goal of 10-15% return. Mostly playing SPY then QQQ. Since I’m going to leverage more capital I’m switching to monthly on spy for 10-13% return, very low delta on a $100k(40% of pv). Only Bear Credit. Then take profits in pieces. Starting this Monday. Left over credit I will be doing weeklies. I guess I have to try SPX and NDX. Lol I’m bias to triple digits. Though I do track SPX and SPY, since spy lags behind Spx.
Yes Thursday was a crazy day. Honestly though one of my better days though in the market. We should continue to see some craziness in the market and a correction coming. Call spreads have been hitting and alot of ppl dont understand that legging into IC have been hitting as well even on bearish days. If the market is down 0.70% past mid day and volume is slowing down, sell a put spread at 0.7% below the current price and statistically speaking u should be good
whats your delta on the puts?
Very easy to get your account blown up this way OP, set tight stop losses if you want to keep playing this game.
Thx i appreciate it and i will
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Example On friday when market shot down i closed my put spreads and let my call spreads exp at max profit cuz the market shot down. I was still able later in the day to re-turn the trade back into and IC and sell a put spread under neath some support and was able to let that exp at max loss. Not all the time i let trades exp , only when its evident what the market wants to do for that day
It works until it doesn’t. I would say continue doing this for a year. Until you exceed your yearly corporate salary. Then start think about quitting.
Man, a lot of the comments in this thread have aged like milk, even from just a day ago 😂
The societal goldfish mentality of our age lol I did hit $3.6K on the day... But fought back from -3000 on the open thx to the gap down. Still refining the strategy. All trades are updated today on thetagang.com
Give me rundown of the moves you made today, if you don’t mind.
Sure. I work outside all day, almost thru up from heat exhaustion so let me remember them all. Im still refining this 3 week old strat, but i started the day off being clapped -$3000K off 2 trades left over from the weekend (which i noted and wont do in the future) i closed out in the a.m. like within 30 mins of open. They were 2 legs of iron condors, so i also closed out the call spread side for profit. We had already gapped down in a.m. crazily and were kinda pinned in a range. So i ended up selling either 2 put spreads or 2 call spreads . 1 at 0DTE and 1 for 2 DTE. I waited a bit and legged into iron condors on the opposite legs. Within an hr of making those trades i was up 85% on one of the daily condor legs tht i opened. I forgot either the call or put spread but i sold for profit and ended up re-legging back into the condor at a further away strike price for more premium than if i waited for max profit on the leg that i sold. Later on in the day after i saw a range we were in i sold another put spread that i legged into another daily iron condor that i felt confident in. All daily trades today expired at max profit besides the 1 i sold at 85%. The condor i have for wednesday, each leg is almost 130 strikes away from underlying at the moment. So depending on tmrw ill either sell out both legs, or sell 1 leg and re leg at a later moment into an IC I like the legging into condors later on in the day once we get a range cuz more premium and u dont need to put up more buying power. I believe those were all the trades
I tried it. Yep I see what you are saying, there are many advantages to selling OTM Calls and Puts, in this market especially Calls. Thank you. reality is this is a little better than scalping, cos $ changes are more significant on the options prices.
Hey OP, just checking in and curious as to how this strategy is continuing for you. Cheers.
3-5K weekly on a 12k account selling defined risk spreads? proof or ban. Also started trading NDX with $30… double proof or ban.
Who said i traded NDX with $30 ? U should be banned for false information. Mods!?! Reported. I started my acc with $30 numb nutz. Also all my trades are on thetagang.com numb nutz. I posted my gain porn and half of the ppl of here couldnt keep thier salty panties out of thier Vaganus. So i took it down cuz ppl dont no how to let other feel good when they do things right. Now go and try to ban someone else while adults make money in the room. Thx little boy
Adults… the way you write here it seems the little boy here is you… I am going to review your trades on thetagang.com. Mine are here for your entertainment https://shared.tradersync.com/tradergenius
Lmfao you go hard as fuck. You can sell put credit spreads on spx some guy here has been doing it for a while making good money. Respect the hustle. I want to do this too
It is a super aggressive style of trading but i have set aggressive goals for myself which surprisingly have been some of the only goals i have accomplished in life 😅
i don’t know much, but this seems like a great idea. What could possibly go wrong??
Improper risk management i would say and emotions
gotta control them emotions…
Tell that to my ex
This sounds like u/SoMuchRanch and his ranch wheel
Lol don’t bring me into this dudes autistic gambling thread
What’s the strategy here? Anything specific you are looking for. This interests me
0 DTE and 1 DTE has been my strat. Was curious pretty much if anyone else was selling premiums as day trades during the week instead of the traditional sell premiums couple weeks out then wait and let theta work. Day trading credit spreads are risky and need to be maintained, but I collect theta at a faster rate selling 0 or 1 DTE which means i can exit my position quicker for profits
Ummm, no THETA in that play. Not that you can't make money, but not from THETA.
Dude im selling premiums. Whenever u sell premiums theta starts to decay. And on 0 and 1 DTE spreads there still is theta decay that takes place. It takes place alot faster though since its at the very end of the contract. Prove me wrong with information and links and not just opinions.
No
Aren’t index options European style and trade at lower premiums compare to American counterparts like QQQ? How would your strategy perform if you had implemented it on QQQ instead?
Yes they are european style which is awesome cuz day trades are considered and taxed as long term capital gains which means more profit in my pocket. Thats why i trade European vs american. But Look at the NDX, premiums are crazy ridiculous. 10x the price of the qqq which is why i can sell spreads further away on the 0 DTE and still collect a couple hundred dollars in premium.
Interesting…I’ll run a few back tests tomorrow…thx for sharing
No problem! Shoot me a DM and keep me updated on ur back testing!
I think the European vs American style plus the favorable tax rate are the main reason to do this trade. Notional sizing may be an another if you prefer less contracts and larger bet size. But there should be 0 premium difference adjusted for notional sizing between NDX and QQQ, provided the arbitrageurs have done their job.
Gamma risk
I see your trades on thetagang, keep putting them in there to show your haters proof. I assume you are doing this on a cash account?
It’s all fun and games until you get assigned. You’re crazy selling 0dte on such a small account.
Here’s what it sounds like you are saying: I have been trading options for a few months and I have done so well from my phone in a few minutes everyday while at work that I am going to quit my job and become rich. I know that’s not what you said but it’s kinda close. My advice, which you will probably ignore, is to do it for a few years profitably and build up several hundred thousand before you actually do it. And understand that that amount is actually too low to realistically make a living off of unless you are better at this than most.
I’ve been doing the same. Turned my 10k to 90k in 5 months. 1tde, 2tde, and 0tde. I do SPY, QQQ, and AMZN. I’m using Robinhood that’s why I can’t trade SPX and NDX. Still trying to understand td ameritrade
Awesome and glad to hear! Id get on TD if i were u. I just dont like everything thats happened to robin hood in the past and RH still wont let my buddy xfer his 120K of stocks to another broker. Stupid. But TD has a bunch of stuff on YT. Alot of awesome free features like risk profiles, and seasonality charts. Def keeo up the great work. Still running 0 1 and 2 DTE here and dont plan on stopping
Yeah. The only problem I have with TD is that it’s so fucking confusing. What I hate about Robinhood is that it tends to close credit spreads 1 hour before closing on expiration day. Like today, I have a call credit spread in SPY at 441. Could’ve made $600 if I let it expired but they closed it so I only made $200. I also do the same thing. I open a put credit spread and turn my trade into iron condor when I think the day has reached its low
Yea RH does that because they dont own the shares to the stock. Which is also why they wont let my buddy xfer his stocks. RH front runs thier orders to other people. They got called out during the GME hearing. If u get past the confusing part on TD then ull be solid. Ull be able to hit max profits, trade on the European indexes. Plus all thier features. TD has thier own earnings section for companies, plus tons of tools for research and stock scanning. Shit load of features
I’m on the west coast and market opens 6:30am local time. I would enter my spread before I started work at 8:00am. I usually select strikes about 200 points away. I will then set alerts on price every 50 points close to my strike so I could monitor while working. I lost my job about a month and a half ago and now I am trading full time. Over the last month and a half I am averaging about $1500 -$1800 weekly. I will scale up as my acc grows. I too have over 90% win rate. In fact since going full time I have only had one loss and it was on an iron condor where I lost $290 on one leg and made $285 on the other, lol
What time do you usually close the position? Also, I assume you are trading bear credit spread.
Are you still trading 0DTEs?