Best Long Strategy with Hedge - ZEEHBS Options Trading Strategy

The ZEEHBS consists of bull back spread and hedged at 50%. The example is shown with the S&P 500 but can be used for any index (NASDAQ, Russell, DOW) or stock you are bullish on.

0 DTE Backtesting Software (50% Off First Year with Link):

SPX Automatic (Bot) Trading (Extended FREE trial of 30 days, no CC needed for signup) [TAT]:

Want to setup a tastytrade account? Use my referral code:

Resources to improve your trading:

Twitter: @decke192

Subreddit: r/IncomeOptionsTrading

See website above for full disclaimer. This video is for educational purposes only and is not a trading recommendation or advice. I am not a registered financial advisor.

0:00 ZEEHBS Intro
0:10 Risk Profile
0:40 ZEBRA
1:21 Why the ZEEHBS?
1:35 Underlyings to Use
2:10 The ZEEHBS Trade Setup
7:08 Valley of Death
8:03 Adjustments
14:09 ZEEHBS vs Straddle

[jaireddy]

The timing of this video!!! I actually came across this ZEEHBS from your 2021 video, and this week was the first time I put it on (on Tuesday, Monday being a holiday). Unfortunately, this showed a negative PnL by Wednesday and I was afraid it would go into the valley of death, so I took off one long call. Terrible for me, SPY rallied on Thursday and Friday to ATH, and I am watching this trade show negative (because I messed with it). Fortunately, the loss is a small amount relative to the gain from my other theta positions.

[pedros]

Hi, great video!! have you ever tried this for an eanings play? seems interesting

[CanadianOptionsTrader]

I remember this trade from back in 2021! How has it done since then? Have you used it much and/or consistently? I wonder how it would perform in a backtester like Option Omega? It doesn't look very good in Lookback.

[DarkElfio]

fantastic video, many thanks. what would be the best volatility conditions for this trade? i guess rising volatility would help

[charliesims]

Awesome video planning on using this for a synthetic covered call in KOLD next week!

[peterschiffer]

Thank you. Question, how can I use this (how to create the setup initially or adjust) if I woud like it more as a hedge to the downside than a strategy to gain wins from the upside.... I mean, what can I do to make the valley of death smaller ? Thank you.

[bluffbattalion]

I wonder how different it is if you do the synthetic, but then buy otm puts/calls. You still get the V on the outcome visual.

[theagemaway]

Can you explaining how this is different from just buying a normal straddle? Seems like basically the same effect to me, but with added complexity

[tvlamb]

How would you do this with long SPY shares so it could act as a hedge.on a long SPY portfolio?

[jigneshsoni]

I am fascinated with this strategy and trying so many different things using its principles. I have hit a brick wall with something I am trying to do. I understand you can create this with no theta decay. So to me if I create a bullish trade, as long as markets stay where they are or go up...I should not lose any money. Also if I create a Bearish trade, as long as the markets stay where they are or go down...I should not lose any money.

So that said....if I create a Bullish as well as Bearish have limited loss on both sides with 0 theta decay but unlimited potential on the opposite side. So in theory I see this as if the markets makes a small move....I should not lose any money since both sides will cancel each other. If the market makes a big move....I should have a limited loss on 1 side but good profit on the other side. But when I do back test....I noticed that unless markets makes a huge move....I am losing on both sides! Why is this the case? What is the loss coming from?

I am available to discuss this on a call if you are available?

[closenbaseball]

Thanks for the trade idea! What’s your thoughts on placing an iron butterfly trade to hedge against the max loss?

[דודסולומון-טמ]

HELLO
THE EXTRINSIC VALUE OF 2 LONG OPTIONS IF Is NOT EQUAL TO THE EXTRINSIC VALUE OF THE SELL OPTION SHOULD IT BE GREATER OR LESS and why?
THANK YOU

[jigneshsoni]

I wonder how would perform if you did it on this on at least 1 year DTE. The underlying most likely would move up or down in 1 year to have a almost guaranteed profits. Also if done on several stocks at the same time would also provide diversification just incase 1/some do not move. Would love to hear your thoughts on this.

[mikes]

Is this simply a re-post of a 2021 video? Not sure why it's being re-posted if it is already here on YT...

[sethmiller]

DO you have a back test of this trade for us to see by chance -- compare how it has acted over a variety of market situations in the past 1-3 years? Paying for this every week can add up, but when we get a market eent you sure will be happy I am sure -- just curious how often it pays?

[Mystery]

Can you make this to play best on the short side aswell?

[jigneshsoni]

Will this have 0 theta decay if you took a long position with 1 year DTE?

[sunnyc]

I already got short positions, how could I hedge it?

[chadb.]

Why not just buy an atm straddle? What am i missing?

[omcincy]

Being on fixed income now, have some capital I want to get the best possible return. I've scalped and done spreads, mainly IC's. If you were to move the 2:1 spread closer, say 427/425 or 427/424, do you have and estimate of how many more SPY shares would need to be used to keep the math the same or improve it? Thanks for any help anyone might provide.