Super interesting video! Thank you! We trade 0 DTE only long (naked) and only on the SPX. Advantages: 1) The high gamma works 100% for us instead of against us 2) Always limited and precisely defined risk (= purchase price of the option) 3) No exercise issues even until market close (cash settlement with SPX) 4) Unbeatably high liquidity with SPX. I'm looking forward to the continuation of the 0DTE video series!
SMB Capital is the real deal.... Seth and Garret have connected a very complex set of relationships (market internals to market sectors to price action) to provide us with an edge in trading. Very grateful to SMB Captial for providing this knowledge.
Good info to determine trending day vs non-trending. Theta as a percentage of the trade is high on a 0DTE option. Gamma distorts the premium like a lens. Say you go from 400 to 404 on a move (1%), buying 402C would maximize gamma capture. You might want to make sure this series covers market maker move too.
@@vickybhatnagar6479 Indian markets are no different from Global Markets like the US. OPTION strategies can be applied to any liquid market including indexes like SPX, NDX with keeping in mind who has control and the changing market dynamics.
I don’t recommend 0 days to expiration contracts for traders with under 2 years experience. It won’t give you time for the trade to work and the time decay will destroy you.
Not true all depends what kind of trader you are. If all you do is scalp and ur in trades on average no longer then 20 min its fine . It all I’ve traded from day one
I don’t recommend it either. If you are taking straight calls or puts, you’ve got to be right right away and you have almost no ability to average in due to the time decay. It’s very risky.
Seth and Garret are excellent educators, amazed by their ability to concisely explain the theory and practical application of these tools. I was able to quickly digest and get a mental context for how strong these trend days are with the Market Internal tools and the ETF filters. You've got a subscriber, looking forward to future videos thank you!
😂 I had to pause the video when you were talking about consumer staples. Everytime things are looking bad everyone runs out and buys up all the toilet paper.😂😂 Thank you for sharing your abundant wealth of knowledge, you guys are changing lives.
Great, great course guys !! I've paid other trading groups, I'm even life time member in a well known group supposed to be good (not true !!) but I started to make money trading after I read the Playbook and start following your channel! ... and free ! Great job SMB !!
There are the credit spreads, now I am happy. I also have a list of inverse ETF's like SPXU, SQQQ, SDOW, etc... just to see if they are all red or all green or mixed along with the Offensive and Defensive Sectors. Good video guys!
Very useful. Effective way to keep things organized in the brain. As a preference, the I would like / love to have a TV template / chart / watchlist configured to be able to easily follow and to avoid interpretation mistakes. The "curious" audience may do it themselves. Thanks
Great video! Would love how you guess manage the trade throughout the day. Especially for the credit spreads, where you put the stops. Because we do have days where the market will reverse on you and get close to your break even.
Garrett had previously mentioned these ETFs in a previous video and I immediately created watchlists for these. They definitely can act as solid indicators of overall market sentiment. Thank you!
Even better for 'high conviction' (if IV skew is in your favor) sell the call spread to buy the put spread... force the market maker to short the stock to balance his delta. Now, you've neutralized your risk on vega and theta, and doubled your gamma and delta risk. Biggest downside is the commissions/fees on a 40-lot with 4 contracts per lot... that's 160 contracts. The fees/commissions will kill you! You've got to have a really great IV spread to make that work and need more than one standard deviation to overcome the trade expense. Thanks so much for the class. My biggest problem with 0-DTEs is market makers that will rob you on the spread. You've really got to work that spread for a good fill, and have a super liquid product to trade that size. Thanks again.
Setup on the SPY seemed pretty solid today for the more aggressive straight PUT options vs the debit spread. VOLD opened around -4 and by 10am was at -9. ADL hovered around -2000 for MOST of the day. Cumulative TICK started at almost -1500, though it went up throughout the day. I got into about one hundred -30 Delta PUT Options today around 10:30am EST. What kind of exit strategy makes sense with this type of play? I had set a 30% limit, but removed it because it looked like we would continue moving down and I didn't want to take a loss on my original position when it comes back down and even doubled down on MORE PUTS as the price was testing the 50 EMA. Was today just a strange day or did I mess something up following the strategy? These ~$6k hits are no fun :\
I should also mention, XLK was around even and SMH was up a little bit when I bought, but all the other offensive plays were down and defensive plays were mostly negative
I left a comment on the previous vid in this series explaning how I put this system to the test several months ago and I found in my opinion, minimal predictive ability of using these indicators because there were many times where you'd see evidence of a trend day and it never happened, or vice versa. I pointed this out in a fair, balanced, non-inflammatory way with examples, and they deleted my comment. What does that tell you? They actually inadvertantly helped me by doing that.
Thank you for explaining the call credit and put debit spreads in relation to ZDTE options. Highly useful info as the markets keep hitting all time highs.
From what I have learned these 0DTE options will work only when the trend is very strong and the options bought are not very far from the trading price. In most of the other cases the theta just eats up the value and we lose all the premium paid. Very very risky for small traders
Thank you for sharing your ideas. So far in the series, you talked about opportunities to trade on a trending day. Are you going to talk about opportunities to trade on non-trending days in later videos?
Great Tutorial, thank you so much. One question about the Strike price for deciding which puts to buy or calls to sell, I know you mentioned 30 Delta is sweet spot, do you consider ATR at all? if yes, how do you decide on the strike considering both variables?
Everyone talks about 0DTE options only for traders that have margin to do verticals, spreads etc... How about something useful for cash traders that can only trade directional ??????
newbie here, still learning, so sorry if my question's stupid. for the put debit spread, do you have to close the position to get the money? or do you get the money when it expires?
What time of day is best to take a look at an ETF list like this and conclude that the market has been open long enough for this to be actionable information?
I still don't understand how to read the "thematic" ETFs. The other two baskets are quite obvious. What do bonds and the dollar tell us about the market?
Great video BUT!!! They don't say that options allow traders to make money fast ONLY when they’re right, but if the market reverses, you can walk away and owe nothing!!! In this and other videos these gentlemen fail to mention that in order to profit from buying/selling an option you must be right in THREE ways: 1. You must choose the right stock; 2. Predict the extent of its MOVE, and 3. Forecast HOW FAST it’ll get there. If you’re wrong on even one of these three choices, you’ll lose money. But when you trade even with small capital, you only have to be right in one way - predictions of stock's movie. that's all and even if you fail you risk just small amount of the traded capital compared to the total amount in case of option trading...
I have been watching a lot of your videos, and averaging all three of my accounts. I am up over 150% for this year. However, what software do you guys use to create such use chart lists? Absolute change from open and oval are very hard to find to add as part of a list that can be sorted by these two column headers? Please advise on software that could do such. Thank you so much for all of your help, I couldn’t do it without your tutorials.
Over at Shadow Trader, we already do this with the weighted Advance/decline, sector map, and iceberg tick studies and Peter’s commentary to get a great read on the market conditions. Come join us!
This is great info; the skeptic in me wonders why they are giving this away. I wonder if this info is becoming stale with the improvement of algorithms and AI? If anyone has a theory about this, please feel free to respond and let me know. Thanks.
Go aggressively if the stock moves big after. Otherwise you should have gone less aggressive... In the hope that stock move more than 2 daily ATR in the remaining hours.
I’ll call myself out. I have an algorithm for post market volume and price action. It is coded to assign a value for the likelihood of the next day’s opening range being higher than the closing range. Yesterday it gave me a 0.03. I failed to use my own proprietary indicator today. Sometimes it’s more devastating to leave 80k on the table than it is to lose (x). Errors of omission are inevitable. I will never misunderstand why I failed to act today.
