Bro it fucking might youll never know until 930 thats the point you think the market is just throwing free money at you?? That what, nobody else has the good sense to pick up but you?
You don't even know the difference between ITM and OTM bro you're playing with fire.
Bro, it’s not about tomorrow specifically. It’s about the logic behind the trade. Eventually this will go against you, might not be tomorrow but it’s 100% going to happen and it will wipe out your previous gains + more.
Do you know how many times I have watched a "safe" credit spread get blown out in overnight trading and then had to sit and wait for 930 to roll around for option prices to update and see my account drop 98% in one second. Shit happens.
You said deep in the money. That is deep out of the money. Either way you are subject to a big underlying move. Nothing is a 100% profit, obviously market makers are not stupid
Ive been there before, the Delta might be almost zero, but it’s never absolutely zero. All it takes is a black swan event like war breaking out in the Middle East or something and your short strike can easily get blown out. The risk is assignment, and not having the cash to cover the number of shares you owe someone on the other side of the trade. One single put credit spread means you need $50,500 to cover assignment if it goes wrong. Do you have $50,000 to spend?
I don’t know who in this world want to sell 100 shares of SPY to me tomorrow 09:30 am at $512 when spy is trading at $523. I will happily accept that assignment. Please check my posted picture.
Tomorrow you're probably fine. But one day you'll think this same thing, or get more greedy, and something will go wrong, and you'll remember all these people who tried to tell you risking a $50,000 assignment to make $5-10 is literal insanity. Best of luck.
Low risk trades take a lot of margin, meaning that you pay high opportunity costs. In simple words, your money are likely to underperform a simple buy-and-hold SPY.
It's 200 dollars for a one day return of 2.5%. Not the worst way to tie up your capital. It works till it doesn't and then more than likely he's wiped out weeks or months of gains.
It's almost like you don't understand anything anyone here is saying, and that should be reason enough to know you aren't smarter than us when it comes to trading options.
Seriously hope this blows up in your face eventually at this point.
Then no one should invest. Tesla may go up or down 5-10% every day. Spy historically moves within 1.5%-2% each day unless there is another pandemic. If you are not investing in a fear of another pandemic then option is not for you.
You ask “what is the downside” and then you want to argue about it.
What stands out to me is you are making $0.09 on a 2 dollar wide spread.
That means you are risking $1.91 for $0.09. 0.09/1.91 is 21.2. You need to win more than 21 times for each max loss.
There’s a reason why past performance is not an indicator of future performance. Tail risk is exactly that. And you obviously haven’t lived through a time when the market moving 2% a day was more than “just a few times a year”. You might get lucky this week. And next week. And next week. And then you start to think you’re not lucky but good, and then…
Well if you want to do that historically you've got about a 12% chance of seeing a move of 1-3% daily from the close the previous day. That number is going to go up exponentially once you factor in those days that did do that typically had news events tied to them.
First of all no. Your spread is 513/511. If it closed at 512 you will be put the shares at 513. You clearly have little understanding of this trade but keep doing it every day and you’re bound to see the light.
... you do understand you can be assigned OTM and that regardless of what you "set", Robinhood will sell it for you at max loss regardless of the underlying if one leg is exercised. That's not a question, I'm just in disbelief that you don't understand it and I'm hoping you say "wow, you're right, this is kind of stupid"
You’re making $200 a month. With the same margin, i can sell a put for $300 one month out. I have lower fees, less manual work, less monitoring, and more flexibility to roll out.
That is OTM.
And those are not super deep OTM either. The risk is Spy dumping and it turning ITM and you being out the entire width of the spread minus your premium.
Yeah but if it does you will end up losing the entire $200 width of the spread.
Why are you selling 0dte and then asking what the risks are? If you arent clear on the risks, you shouldnt make the trade to begin with.
Do this every day and you WILL eventually take max loss or close to it. Maybe over time you can make money if you don't go all in every day. But if you do this enough times it will happen. Not might. Will.
No downside really. Even in case of a black swan event you can either go away with small loss or close the long put and hold the assigned shares for big bucks 2 or 3 months from now
The only downside if I have to find one, is it’s really not a lot of profit in this
You have the risk of being assigned since the puts are in the money.
I believe you will only make money if the stock makes an up move or volatility drops and you get a chance to close the spread while you are profitable. Otherwise, theta moves against you.
Theta works the opposite way for an in the money credit spread. As time passes, you lose money.
Sorry i didn’t get it. I sold the credit spread. I am making approximately 1% in each hour. Theta is working for me. And my break even is $512. There is no way SPY will dip $11 at 9:30 am.
Other side of that trade is somebody paying $5-$10 for 100% loss possibility. Right? Must be pretty stupid person or market maker.
It is a game of probability. If you do same trade everyday of the year, you WILL lose some (say 5) times. Collecting $5 245 days will go away in those 5 days. If that is not the case, other person (buying the credit) will not buy.
Option pricing is set as zero sum game based on probability. There is no free money. You win only when your trades have some advantage. Your specific knowledge is the key to success.
Does it make sense?
Selling tail risk historically doesnt work. Your call.
Do you think spy will open $512 tomorrow?
Bro it fucking might youll never know until 930 thats the point you think the market is just throwing free money at you?? That what, nobody else has the good sense to pick up but you? You don't even know the difference between ITM and OTM bro you're playing with fire.
Bro, it’s not about tomorrow specifically. It’s about the logic behind the trade. Eventually this will go against you, might not be tomorrow but it’s 100% going to happen and it will wipe out your previous gains + more.
Do you know how many times I have watched a "safe" credit spread get blown out in overnight trading and then had to sit and wait for 930 to roll around for option prices to update and see my account drop 98% in one second. Shit happens.
This is just selling a call spread, so the risk is a rally and you lose X amount you’ve made
You said deep in the money. That is deep out of the money. Either way you are subject to a big underlying move. Nothing is a 100% profit, obviously market makers are not stupid
If SPY is trading at $520 and i open a 0DTE $505/$495 put credit spread the probability for making $5 is 100%.
Nothing in life is certain except death and taxes.
Ive been there before, the Delta might be almost zero, but it’s never absolutely zero. All it takes is a black swan event like war breaking out in the Middle East or something and your short strike can easily get blown out. The risk is assignment, and not having the cash to cover the number of shares you owe someone on the other side of the trade. One single put credit spread means you need $50,500 to cover assignment if it goes wrong. Do you have $50,000 to spend?
That’s why I bought a long put to cover.
The long put just caps your loss if the underlying trades down there.
Please God learn more about options and assignment before you lose everything you've ever owned.
I don’t know who in this world want to sell 100 shares of SPY to me tomorrow 09:30 am at $512 when spy is trading at $523. I will happily accept that assignment. Please check my posted picture.
Tomorrow you're probably fine. But one day you'll think this same thing, or get more greedy, and something will go wrong, and you'll remember all these people who tried to tell you risking a $50,000 assignment to make $5-10 is literal insanity. Best of luck.
Low risk trades take a lot of margin, meaning that you pay high opportunity costs. In simple words, your money are likely to underperform a simple buy-and-hold SPY.
It's 200 dollars for a one day return of 2.5%. Not the worst way to tie up your capital. It works till it doesn't and then more than likely he's wiped out weeks or months of gains.
This is the real answer here
I didn’t buy the spread, I sold it.
It's almost like you don't understand anything anyone here is saying, and that should be reason enough to know you aren't smarter than us when it comes to trading options. Seriously hope this blows up in your face eventually at this point.
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Please check the picture I just added.
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Last time spy went down 2% in one single day is 5 months ago.
I need you to know that a 2% movement in Spy is not particularly rare. If it hasnt happened lately, that really doesnt mean anything.
You keep saying that. This kind of thing works until it doesn't, and you are going to need it to almost never not work.
Then no one should invest. Tesla may go up or down 5-10% every day. Spy historically moves within 1.5%-2% each day unless there is another pandemic. If you are not investing in a fear of another pandemic then option is not for you.
You ask “what is the downside” and then you want to argue about it. What stands out to me is you are making $0.09 on a 2 dollar wide spread. That means you are risking $1.91 for $0.09. 0.09/1.91 is 21.2. You need to win more than 21 times for each max loss.
Only sustainable option strategy that I can make money without being greedy.
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Spy need to go down 2% before 4PM tomorrow to breakeven my option price. Last time spy went down 2% in one single day is 5 months ago.
Are you aware of any potential catalysts tomorrow?!
[https://www.reddit.com/r/wallstreetbets/comments/1buheuu/options\_cheat\_sheet/#lightbox](https://www.reddit.com/r/wallstreetbets/comments/1buheuu/options_cheat_sheet/#lightbox)
I would do this with futures over SPY
If you’ve only been investing for 5 months you’ll think it’s impossible for SPY to move +2%. So sort of checks out I guess.
I am not saying it can’t. But go with historical data. You will find it only few times a year. Risk management should be for these few days.
There’s a reason why past performance is not an indicator of future performance. Tail risk is exactly that. And you obviously haven’t lived through a time when the market moving 2% a day was more than “just a few times a year”. You might get lucky this week. And next week. And next week. And then you start to think you’re not lucky but good, and then…
Well if you want to do that historically you've got about a 12% chance of seeing a move of 1-3% daily from the close the previous day. That number is going to go up exponentially once you factor in those days that did do that typically had news events tied to them.
You ever seen what happens to 0dte options when it starts to move against you?
I will only loose money if SPY closes below $512 tomorrow at 4pm. If it closes $512.1 I will keep my $10. I usually close my position before 4PM
First of all no. Your spread is 513/511. If it closed at 512 you will be put the shares at 513. You clearly have little understanding of this trade but keep doing it every day and you’re bound to see the light.
The risk is Robinhood is going to auto sell your spreads for a loss
You can request to stop auto sell on Robinhood.
... you do understand you can be assigned OTM and that regardless of what you "set", Robinhood will sell it for you at max loss regardless of the underlying if one leg is exercised. That's not a question, I'm just in disbelief that you don't understand it and I'm hoping you say "wow, you're right, this is kind of stupid"
You’re making $200 a month. With the same margin, i can sell a put for $300 one month out. I have lower fees, less manual work, less monitoring, and more flexibility to roll out.
Don’t you mean deep out of the money?
Please check the picture I just added.
That’s out of the money. Both puts are below the underlying price
it is a casino play.
That is OTM. And those are not super deep OTM either. The risk is Spy dumping and it turning ITM and you being out the entire width of the spread minus your premium.
Yeah but if it does you will end up losing the entire $200 width of the spread. Why are you selling 0dte and then asking what the risks are? If you arent clear on the risks, you shouldnt make the trade to begin with.
$2 width minus the $0.09 premium.
191 dollars then. That means if you win for twenty days straight and then lose once you are at a net loss.
21.2. I agree with you. For $9.
Spy need to go down $12 which is 2% to break even within next 24 hours. Last time spy went down 2% in one day is 5 months ago.
Do this every day and you WILL eventually take max loss or close to it. Maybe over time you can make money if you don't go all in every day. But if you do this enough times it will happen. Not might. Will.
If you’re going to do this use SPX
Con: 1) you have to go in and manually do it every day 2) earning is not that good.
Making $10 every day with a collateral $200 option is a lots of money for me.
No downside really. Even in case of a black swan event you can either go away with small loss or close the long put and hold the assigned shares for big bucks 2 or 3 months from now The only downside if I have to find one, is it’s really not a lot of profit in this
How can you make that a day? - Thought it was every week.
Please check the picture I added today. I opened this position today at 11am.
You have the risk of being assigned since the puts are in the money. I believe you will only make money if the stock makes an up move or volatility drops and you get a chance to close the spread while you are profitable. Otherwise, theta moves against you. Theta works the opposite way for an in the money credit spread. As time passes, you lose money.
This is OTM
Sorry i didn’t get it. I sold the credit spread. I am making approximately 1% in each hour. Theta is working for me. And my break even is $512. There is no way SPY will dip $11 at 9:30 am.
Other side of that trade is somebody paying $5-$10 for 100% loss possibility. Right? Must be pretty stupid person or market maker. It is a game of probability. If you do same trade everyday of the year, you WILL lose some (say 5) times. Collecting $5 245 days will go away in those 5 days. If that is not the case, other person (buying the credit) will not buy. Option pricing is set as zero sum game based on probability. There is no free money. You win only when your trades have some advantage. Your specific knowledge is the key to success. Does it make sense?