0 DTE Options: How to Turn a Losing Trade Into a Winner

Learn the top 3 trade setups we are using on the desk here: tinyurl.com/yz...
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#0dte #optionsstrategy #optionstrading
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[@smbcapital]

Learn the top 3 trade setups we are using on the desk here: tinyurl.com/yz785rxz

[@alexreznichenko756]

I would say the roll should be case by case bases. What I mean is at times with 0dte you already have over 680$ in profit and rolling it I just talking in risk for less money. In those cases I think it’s better to close rather then roll. Typically if I hits 30% I am out with at least half of my position. I found it to reduced my losses by 67% with smoother profit curve over time

[@sethfreudberg4750]

Hi Alex, sounds like a great protocol to follow. Rolling is a defensive move. It's not done to preserve profits, its done to protect against a loss in almost all cases. If i was up 30% and had to roll, I'd just close the trade just like you do.

[@alexreznichenko756]

@@sethfreudberg4750 yeah for sure I think it’s great! What would be good management strategy if the trade quickly goes against you and your itm?

[@Kyle_opt]

@@sethfreudberg4750 As a newbie, I was thinking similar here - as one leg is threatened, close the position. So the math question is then, do ODTE options gain or lose value (typically) in a straight line versus having big changes near the end of the period (last hour, for example) similar to month long options (for example) having their time decay ramped alot near the end of the month vs beginning. Does the behavior of a Odte seem to mirror the behavior of other more common expiration cycles? Thanks for the vid series, it gives confidence and knowledge. Pretty interested in getting into your classes even!

[@Capital_Trades]

I'd agree to get when you're green. I rarely roll because then you're setting yourself up for more exposure to unexpected risk.

[@HarryLewinASR]

Great Video. Typos : The long Call at 4565 is labeled 4465. Misread: the long put at 4435 is read as 3535. At 5:38.❤

[@NandoCamek]

y, got me confused

[@rgoudie]

Honest to god, I was just pondering this very concept yesterday, after having watched another SMB Capital 0 DTE video. Now... here it is. Thank you. 😃

[@sethfreudberg4750]

Happy you enjoyed it Rgoudie!

[@Michael_W87]

Seth thank you for teaching. I have watched a few of your videos but the fact this is free education on the internet videos like yours is so valuable. Really do appreciate all the efforts SMB and u and the Lance guy have put into all of them making us better traders. Makes it not as daunting as it seems to be especially with the 0dte. Not sure if u will even see this comment but thank u

[@hsujaya]

well, if on that day, the market kept going down, further below your adjusted position after the roll, you will have double loss. It's always easy to do a case study on yesterday's event. good luck.

[@alexsimard5151]

Interesting move, will definitely attend to one of your options trainings. A couple of questions on this trade: What would be your trigger to roll the puts lower? The short option price or say market reaching $15 from the short strike? What would you do if the market decided to go against the put position a second time? Would you take another $1,500 loss for a net -$820?

[@NoGuranteesOnlyProbabilties]

I don't do 0dt, I usually do 45dte. I roll the untested side receiving more credit as I feel like rolling the tested side is adding more risk to the trade as I'm paying a debit. But great work thorough explanation

[@sethfreudberg4750]

Yes 45 DTE is a much more calm trade, but you'd need to back test to determine comparative expectancy.

[@chaogao998]

@@sethfreudberg4750 never touch the test side

[@almostSkater411]

@smbcapital the chart starting at around 4:43 shows "cash paid buying 4465 call options" but it should be the 4565 strike. Just wanted to minimize confusion

[@sethfreudberg4750]

Thank you almost! we'll correct that.

[@petegranneman1623]

Rolling should be case by case - rolling for a debit on a 0DTE on the same day has the potential to lose even more and profit even less. $680 profit for $24,320 at risk with 0DTE Iron Condor on a trending day is definitely not a position I would want to be in, especially considering the excess kurtosis of the SPX. Rolling for a debit increases value at risk, and given the excess kurtosis in the SPX, it is more likely to continue its move than expected by a normal distribution of returns. Just when you think the index can't possibly move further, it often does just that... Personally, I would only roll out in time for a credit AND if I had very good reason to believe the current downtrend was likely to reverse due to news or examining volume profiles etc. Perhaps a hedge shorting /ES with a stop loss in the body of the condor would be preferable in this situation. Certainly not financial advice and futures trading is beyond the scope of this video.

[@roy.mclean]

Could you also roll the short call (leave the long call alone) in addition to the puts in and effort to collect additional credit and improve cash flow?

[@jamesottaway3212]

Thank you so much for these videos, and for taking the time to interact with the comments. At the start you imply that this strategy works only if the underlying has been in a tight range. Or can it be applied to an index option on a pretty regular basis? The short options are placed at the outer limits of the range; are the longs always at a set distance from the shorts? If one is watching closely, and the option is heading against you, can you nearly always get out of the trade before incurring loss?

[@cluggyahoo]

Thank you for your content. I appreciate that you answer every comment. At what time do you suggest placing an IC on SPX for 0dte? Right after the open or you wait at least 45 minutes tobetter guage the underlying ? Aldo, isn't an IB better for 0dte since the risk reward is better?

[@zahooransari3680]

I’m testing 0DTE SPX n NDX in Test account. So far.. test results are pretty good.. since now we are in a trading range.. where by stocks rally in the morning till 10:30 - 11 am. Then the mkts roll over and try rally back in the afternoon but fails. Downside it requires huge deposits!

[@ddroz23]

You can also roll up your Call side to gain profit back. The call side moved so much that your in profit. If you also rollup the Call you can collect more premium if it is not to late in the day. say 2pm

[@stevemccullough7075]

Great video Seth! I have started to become profitable in my trading. I owe a lot to you and SMB. I hope to trade for you all sometime in the future.

[@sethfreudberg4750]

Keep working hard Steve and you'll get there!

[@dc-wp8oc]

Seth, in this example, could a roll still be executed after the short put was breached? And is this roll executed as one trade or put another way, are both of the PUTS adjusted at the same time?

[@omsun8]

so how soon you decide to roll the losing side of the iron condor? for example with SPX - is it 15 or 10 points from the sold side or ? Thank you in advance. I appreciate your help.

[@tommymoua2475]

Curious what your thoughts are on this? I purchased 5 x AMD call option back on 1/26 with 190C / Exp: 2/23. Cost was $8.09. Breakeven is $198.09. Is there any hope to save this call option or just take the loss and move on.

[@jayscottk]

I appreciate you not telling us how index options work for the 300th time.

[@Takkaho]

How hard is it to skip? Instead of being thankful for the free information you need to complain about something that takes u 2 seconds to do.

[@sethfreudberg4750]

Lol @Jayscotk, what you may not realize is that many people watch these videos for the first time, have literally NO idea what an index option is and then get confused and close the video. So I do that for the newbies and the ones who already know the info can just skip it as Takkaho suggests

[@vincentlarochelle6521]

I've been watching your and TastyTrade videos to help bolster my options trading. Thank you for your time producing all of these great videos Seth!

[@nevinkuser9892]

index options are cash settled. Every point over the strike is equal to $100. DID YOU KNOW THAT?!

[@ca-pathshalapune5203]

what if there is sudden spke in option premium ???? plz explain ?

[@shanenorth8663]

When you roll, do you do it all on one order or do you use separate orders?

[@chaogao998]

When u dont do iron condor at beginning instead of iron buttfly, then still fix iron condor from call condor roll or put roll? What s the difference

[@TheCbrown146]

Can you mimic an iron condor with a cash account?

[@jasonpermanna308]

Do I need a collage degree to work for SMB capital to be an option trader?

[@gogirl8045]

Oh hallelujah..I NEED this..gack omg 😱 😫

[@tylerweitz3644]

Seth is my favorite guy at SMB.

[@makinqmoney]

who is your least favorite?

[@sethfreudberg4750]

You're just saying that

[@tylerweitz3644]

@@sethfreudberg4750 yeah you're right, but def top 30

[@jagtarsingh8562]

Hello Seth, thanks for this valuable information. For some days, I am looking for some simple options backtesting software (which doesn't require any coding). I know there is tastylive but doesn't work intraday. Can someone help me? Thanks in advance

[@wheeliewheelie]

ill never understand why you guys dont use the analyze tab on tos to show the exact trade...

[@fckyea8056]

Great strategy thanks 👍👍

[@-mr3puttz-310]

And if it keeps going down torwarda the eend of day?

[@sethfreudberg4750]

Then you probably lose the trade and take your stop. Options trading is a statistical game and those include wins and losses as I'm sure you know.

[@Eqnotalent]

But when do you do the roll? As soon as it hits short strike or when is 5 pts away? Same day roll only works if it happen early if the day. If your short strikes is getting tested late of the day, rolling down gets $0 credit.

[@sethfreudberg4750]

If the roll is later in the day, you're probably profitable by then because of the theta decay Eqnotalent

[@janly1613]

What about credit spreads? How do you fix a losing credit spread trade in 0DTE?

[@sethfreudberg4750]

We can do a video on that Janly1613

[@ed.xoxox7]

I’d love to watch a video on how to defend a 0DTE credit spread since, for now, I have not figured how to roll such position effectively 🙏

[@yoginacharya2150]

Great educational video 🙏

[@sethfreudberg4750]

Thank you Yogi

[@kenuchaccordionlessonsintr6003]

Thanks I learned a lot

[@kempelben3834]

Its not really lessening your risk, just increasing the probability of profit. You've gone from risking $25K to make $2180 to risking $25K to make $680. You've given yourself more space, but there is no free lunch.

[@sethfreudberg4750]

@Kempelben I would argue it reduces the PROBABILITY Of a loss, not the reduction of absolute risk. Increasing win probability is a pretty big deal.

[@adsfadd-d6w]

sounds nice to work at your firm but i prefer the beach

[@Dsdoung]

Hello sir. how do you turn this losing trade to a winning trade? Date of purchase 07/20 TESLA buy call @ 270 and sell call @ 560 strike expire 12/15/2023 right now I’m down 70%. please help. Thank you

[@sethfreudberg4750]

That is a debit spread so this technique won't work. An iron condor is two credit spreads.

[@AS-yc3wp]

I trade 0dte 3 times a week in the last 15 minutes as one strategy, works well, high win rate, only issue is your broker getting nervous and is assigning you, happened to me on Monday where I was assigned $105k in Spy, sold it for a good profit though by letting my call run 😁

[@sethfreudberg4750]

That's not an issue if you use index options.

[@AS-yc3wp]

@@sethfreudberg4750 unfortunately it was an index option, it was SPY.

[@joeschmoe1794]

@@AS-yc3wpI think he means SPX as opposed to SPY, which is an ETF.

[@BeefEnt]

Great video 😂

[@sethfreudberg4750]

Thank you

[@cathlandemmanuel831]

Nice video

[@sethfreudberg4750]

Thank you!

[@jphone9200]

amazins

[@akashshrivastava4415]

That should be 4560 call

[@warmex]

I wish this applied to futures trading, with options i just get lost

[@sethfreudberg4750]

@warmex why don't you watch this video and it will help alot: kzbin.info/www/bejne/rZClm3mjl9yVj6M

[@normfoisy4968]

That's a horrible R/R when you set up the trade. No bueno!

[@NandoCamek]

okla

[@user-zx8db8sf2t]

Better idea: just start with wider wings that has $680 or whatever the number is and go to sleep. You do not need to “aggressively” manage your trade.

[@sethfreudberg4750]

Wider wings just would add risk.

[@TwoBlueScrews]

It's clear, I'm a dumb trader.

[@sethfreudberg4750]

You just need the education.

[@dondadondon1213]

Nope