How We Trade 0DTE Vertical Spreads (without over spending) | Zero Days to Expiration Options

Subscribe to our Second Channel: @tastylivetrending

tastylive is a real financial network, producing hours of live programming every day. Follow along as our experts navigate the markets, provide actionable trading insights, and teach you how to trade. With over 120 original segments, and over 25 personalities, we’ll help you take your trading to the next level, whether you are new to trading or a seasoned veteran.

Past performance is not indicative of future results. Performance is not presented net of all commissions, fees, and expenses. Multi-leg option strategies incur higher transaction costs than single leg trades as they involve multiple commission charges. Examples provided are for illustrative, informational, and educational purposes only and are not intended to be reflective of results you can expect to achieve. Supporting documentation for any claims (including claims made on behalf of options programs), comparisons, statistics, or other technical data, if applicable, will be supplied upon request.

tastylive, through its content, financial programming or otherwise, does not provide investment or financial advice or make investment recommendations. tastylive is not a licensed financial adviser, registered investment adviser, or a registered broker-dealer. 

tastytrade, Inc. (“tastytrade”) has entered into a Marketing Agreement with tastylive whereby tastytrade pays compensation to tastylive to recommend tastytrade’s brokerage services. The existence of this Marketing Agreement should not be deemed as an endorsement or recommendation of tastylive by tastytrade. tastytrade and tastylive are separate, but affiliated, entities with their own products and services. tastylive is the direct parent company of tastytrade.

[bryanharper]

In my experience, 0 DTE is for traders that want to stay in their seat the whole time the trade is on and are only managing THAT TRADE. You know, people that like to be done by 11:30 EST and want no overnight risk. My B&B is a 10-12 delta IC placed around 9:40 and pulled during the 10:30 rebound. If I miss the 10:30 exit, then I usually get another chance around 1:45 EST.

[constantins]

Do not trade to make a fortune. Trade to make an income. First try to cover your daily expenses. Then add. If you can be consistent and disciplined, continue. If not, take a job.

[nevinkuser]

After doubling my account and then losing everything 3 weeks in a row... I'm more interested in 45DTE.

[rogjerr]

I recall trying this years ago, but tasty would close out the trade even when they were OTM, and I was forced to take losses on winning trades... thanks

[OptionSpreadProfits]

Video does NOT answer the title. you did NOT explain how you trade 0DTE. Why dont you pay more attention at the title writing?

[prebenebbesen]

You should market your TastyTrade hat. Looks cool. I’d buy one.

[zshn]

Instead of +/- $ amount it should have been measured in +/- % movement. That would have normalized the movement. 2$ movement 10 years ago is different than 10 days ago, but 1% move is the same.

[AnthonyGargini]

Word to the wise. The temptation to chase your loss on these things will have you blowing up your account in no time. My advice is you lose, you snooze.. meaning if you lose that day, sleep on it and try again tomorrow.

[SPYSpreads]

0DET on spreads are like gambling in my trading experience. What worked out the best for me is 1 -2 weeks DET 20 delta. At 50% profit I close the trade and rinse and repeat.

[richardbaxter]

Excellent study as always! The one thing nobody talks about in ZDTE's is the COST. Surely that has to be a huge unspoken factor....

[theMillerCode]

Great study. I like the risk to reward of 0 DTE butterflies vs the 0 DTE put spreads. Has the team done a study on 0 DTE broken wing butterflies?

[ronjcash]

On 0 DTE's you need to do extreme high probability at .02 to .05, have even done .01, Deltas on selling put or credit spreads. I have been testing this and have had 100% wins in two weeks of testing. I usually wait till 11:00 to 11:30 am to let the market decide where it's going and I use a SPX $5 wide, then I can adjust at 1:30, if needed. I close early if I can or let them run till expiration. And use a commission free Broker. Just increase your quantity of contracts bought and like any trade, be ready to roll!

As far as managing I have no problem being in my seat and viewing the screen all day, since as a business intelligence and artificial intelligence consultant, I am sitting in front of my screen at home all day anyway with my chart monitor to one side.

[jekylltraveler]

Would be interesting to see a study where overnight risk is factored in. With 0 dtes there is none. But how much is there in 45 dtes?

[stonksdays]

You need to be right and right often. You really can't go off option theoreticals either. You need to account for slippage and in the case of your $1 wide vertical of $27 your win rate needs to be 73% to breakeven or 7% edge on the 66% POP because your premium would be $33 if you weren't paying somewhere. Another way to think about it is the house having a 7% edge against your trade for that example. To the gamma risk side of this video yeah if you're a directional guy this is your domain otherwise yeah stay away

[TQFMTradingStrategies]

Writing these 0-3 DTE options that everyone loves is the new meta but its got a decent barrier to entry both knowledge and capital. Doing it safely is very difficult. Shovels in a gold rush sort of idea.

[paulherlichka]

Selling, and at the money and buying one strike out of the money on zero days to expire yields and net credit greater than 50% of the max loss even net of commissions. The strategy seems to deliver a positive expected value with enough occurrences, correct?

[hc]

it makes sense when you look at it this way. tradeoffs are collecting a fraction of the credit but more directional risk. of course the trades of 0dtes come off faster and require more management and fees

[geoffd]

you should show the options in pennies not dollars like you did in your example. Keep it consistent and accurate. If you trade options and don’t know the $.27 equals $27 then maybe you should trade something else.

[ryannoe]

Looking at the chart at 6:30ish… the gamma “risk” is skewed into the trader’s favor. 10x positive, 13x positive, 25x positive, -5x negative, -16x negative

[damaddog]

So If I get this right, if one insists on placing zero-Day-To expire type spreads, you better be using 45-day to expire spreads instead or if the market moves against you, rolling will be useless.