How This Professor Unlocked a Winning 0 DTE Futures Strategy

Physics professor reveals how he achieved positive annual returns trading crude oil options with a mechanical strategy. Using $50,000 capital, he generated $18,000 profit trading 0-2 DTE strangles three times per week. Watch him share his "$1 per day" rule that led to him having 12 straight profitable months without a single four-figure loss.

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[BajaPete]

skip to 16 minutes for the trade discussion🍺🍺

[Ironbob]

What stands out is the focus on process, discipline, and risk management—these kinds of interviews do more for traders in the long run because they emphasize sustainability. The strategies may not be as sensational, but they’re grounded in solid principles. And when those fundamentals are put into practice with patience, the results are much more meaningful and lasting.

For traders with smaller accounts, applying disciplined approaches to strategies that better cover risk—like using a weekly iron condor or identifying breakouts that warrant sitting out or employing a strategy to capture upside, such as a vertical spread or calendar spread—can provide safety and scalability for smaller account sizes.

[Bubs]

I like it. Look at the trade a limited times a week. Same time always. Never watch, never sweat. Adjust when you need to, or leave it alone.

[JamesRohlf]

For those that are doubting my strategy, that is a good thing, I would never depend on anything that I did not understand. January had an extreme move in oil. Here is my hindsight analysis. We opened at 71.45 on January 2. We went all the way to 79.21 in 14 days including a monster jump of 3.08 on Jan 10. Oil was actually up 4.22 at one time that day. That is really nasty and I was printing red ink UNTIL I eventually caught up with it on Jan 16 and then another nightmare happened, the market turned and dropped like a bomb, 8.78 in 21 days including a monster drop of 2.56 on Jan 21. I now had to play catch up by rolling into the downdraft. I just made my last trade on the February contract (closes Feb 14). The net gain on this contract
(/CLH5) was $2029. from 20 trades.

[Christine-vs]

Thank you Tom for another interview. I really think it’s eye opening to hear other trader’s strategies. You ask really great questions

[mcloin]

Good discussion. His $1 on /CL is a 1.4% move. May be helpful. I don’t want a strategy that requires me in place at 1:30 each day.

[vmoutsop]

Cool story, glad you guys found the professor and put him on.

[OptionsJive]

Actually, I did something very similar on /GC, and it worked really well.

[Sunflowers-Pumpkins]

The strategy: He’s basically selling out-of-the money strangles (short call and short put) at about .1-.2 delta (depending on premium) at 1dte or 2dte in the /cl.

If he needs to, he’ll roll. If he gets assigned, he’ll put in an order either to buy or sell the future to close the position. Or he’ll adjust his options positions to address that he’s been assigned.

He makes about $600 a week doing his strategy.

He focuses on one product instead of trading many different things.

[keps]

Very interesting. Go out 1$ OTM 1 day to expire, 2$ on a 2 day, let expire and the next trade is "auto adj " b/c the /CL is always moving. With an expected move of .60-.70 cents (dep on vol) your probability of a OTM expire must be in the 80-85%. Just beware that 20%... ;)

[opitz]

Don't ever retire Tom! Serious question though, I've watched a ton of videos and so like if I do this with an iron condor with similar metrics and one of my sides gets tested, when I roll up the untested side, how far am I going? If my calls are tested and I want to roll my puts up in price closer to those calls or that call vertical spread, which side of the calls am I going?

[MichaelDavidRobinson]

What I really need Tom is to learn how to trade small but trade large enough at the same time to multiply a large account efficiently. Because the bigger you get the harder it is to trade on scale.

[northwestrider]

This title is wrong, he said he will do 1-2 days ahead. He may do some 0DTE but mostly does 1DTE and sometimes 2DTE.

[bradreid]

It's an interesting interview. I liked it. Tom rather immediately sniffed out the issue regarding a possible large loss, an "LTCM" sort of event that took down a company (w/ lots of PhDs) when Russia unexpectedly devalued its currency ('98). We saw a smaller version of this sort of calamity when a Japanese move just this past July caused the Yen carry trade to briefly unsettle markets in a big way. I can think of dozens of other sorts of black swans. I'd categorize this, I bet Tom does too, as a trading system with a high win/lose stat, a rather low avg $ gain per trade, all the while with looming potential for large losses suffered infrequently. I also would bet Tom ain't clipping the wings off of his iron condors and other strategies anytime soon! *Maybe he'll convince Tony B to experiment with it using his money! Ha! I love these personal interviews showing lots of ways "to skin a cat."

[MichaelDavidRobinson]

What is not said is on the weekly's 2 strikes away for 2 days to expiry is .50 cents or .25 cents a strike. That is not the .70 cents spoken of per historical one day movement or 1 dollar per strike per day to expiry to stay away from be itm comfortably, spoken of in normal terms, so this was undefined rendering the whole conversation unanswered. I trade CL so that is the structure on the weeklys of .25 per strike by a 1000 multiplier so $1 is a 70, 000 contract, and a .70 cent move per day trying to stay otm as though each strike is a $1 makes sense but it is not $1 per strike, instead, it is .25 cents.

[guyredares]

Newbies: 'Oh, that sounds like a great strategy, I will start doing it tomorrow!'
Experienced traders: 'Oil doesn't move that much? yeah right, I have seen this movie before 😅'

Why is the title 0 DTE when the strategy is 2 DTE?

[businesscat]

Ya'll remember Karen the Super Trader? Similar strat. Works until it doesn't. We don't hear about her no more cause her fund eventually imploded.

[samir_]

Interesting strategy being so close to the money at such a short expiration i can imagine he’s constantly rolling & adjusting

[johndrop]

I love when Tom does these interviews.

[Mike_Affholder]

Would be cool if they showed some charts and maybe samples or the trades. I understand with them talking but with visuals it would be even better. Great as always!