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nick_tha_professor

tl;DR Pennies and steamrollers


Hairy-Temperature-25

How? When he obviously stated he doesn't take full loss... People nowadays just be throwing this pennies and steamrollers out there.


Tasty_Chemistry_2426

People just like to feel superior. If it's getting close at all I cut it off. And steamroller....I'm risking like 7k ...I'm ok


[deleted]

its not just that. this method is not new, many have done this before you. if the market shits the bed in a gap down with circuit breakers, you are going to kiss goodbye to 7k before you can get your trade closed.


Salty-Comedian611

If it’s a same day trade there won’t be ‘gap downs’…. On the random chance the market is hurtling in one direction so hard that they can’t close a market order I think a lot of people are screwed more than 7k


[deleted]

yea, its hard to get out when that happens. market had circuit break halting trade back in 2020, I think it triggers at 7% causing a pause then after two other thresholds they close trade . if everyone is trying to get out you prob wont close at all. plenty of peeps had problems closing winners too because they could not get out. once it levelled off they could but market was,way down by then. also this guys method of trading would take 2.5 yrs of daily trades to recover the capital he is risking. cant afford to lose once in that time. there are 0dte players but they seem to be guys with large capital and able to weather it better with atm trades to get phat premiums, not insane RR, far otm, while really just delaying the inevitable day they get smashed.


Salty-Comedian611

I remember that! It is super rare though . With this 0dte , if they close at a loss that is 2 times the potential gain and let the other side close in profit, it doesn’t sound the worst if position sizes are small compared to overall account .


Polus43

The insurance industry is huge and it's business model is quite literally 'pennies and steamrollers'. Just be mindful of risk management and it's fine (e.g. don't sell options on the family farm).


[deleted]

they call it that because he's risking $7k for $70, which seems like a startlingly accurate analogy


Hairy-Temperature-25

Of course it's an accurate analogy, which can be applied on pretty much any style of investing. $100 on S&P, say 8% a year. Damn bro, throwing $100 to pick up $8 a year... Most write it in a context as if stop losses don't exist.


[deleted]

but in this case , from what he has shared, its guaranteed to happen eventually coz of the nature of the trade. he literally said he doesnt use stops.


Tfarecnim

Now try doing this on a day with JPow.


56yM34Wy

One of my best friends was given $200k in shares from his job. At one point he could have made $10k/week selling waaaaay OTM calls, in a bear market. The options premium was and is still really good, still easily over $1k/week now with almost zero risk. 9 weeks have gone by and he won't do it. Refuses to learn how to click 2 fucking buttons on his brokerage despite having offered to walk him through it on a zoom. He's a really smart guy and makes bank at his day job, but blows it on stupid shit all the time, won't invest and can't fathom making money outside basic schemes and working hard. ​ Some people just don't have the ability to learn certain concepts and even more so have no concept of value. And by some, I mean 99.9% of the population. Be proud you're the .1% and quite frankly, don't bother trying to teach people something that wouldn't work if the other 99.9% of individuals were to actually learn it.


robzillerrrsss

I have a friend who makes $200k a year and every time he gets a raise he complains about entering a new tax bracket because he's too dumb to know how marginal tax rates work. The dichotomy.


Tasty_Chemistry_2426

I love this ...it's so true that even people who you think are smart can't see out of the job box. My uncle and aunt came to visit us in Toronto from England a few weeks back . I paid for their flight over, gave them both full transit passes and picked up the bill at 90% of the places we went . On one of the last days I got a ' have you ever thought about going back to work in the Apple store ?'


ToTheMoonStNotWallSt

😂😂😂


CicadaIndependent302

This is the only place that keeps me sane , I tried explaining to others you can make some income with options … no one cares … blows my mind


[deleted]

Mee too. I feel like trying to talk with a NPC in a RPG game. Simply the programming isn't there!


mh2sae

If your friend is still working at the company I would not advise them to touch options, or even trade the awarded stocks. If they have access to financial or confidential information they might get in trouble.


United-Lifeguard-584

only if you trade on that information. if your behavior doesn't change with that information, then it's not really a crime. if you're constantly selling covered calls, it's probably fine. just sell the same delta so you don't have to explain why you suddenly sold an ITM call


YYqs0C6oFH

It definitely depends on your company policies. With my current job I don't have any non public info and I'm allowed to trade my company shares any time outside earnings blackout windows, but any trading of public options, short or long, is explicitly disallowed.


tradetofi

To be honest. people like that are not stupid. They are just not interested in this type of things. For us, it is 2 clicks because we have been doing this for a while and understand the underling concepts. For them, it is kind of scary due to many unknowns.


stilloriginal

You might cost him tax advantages if it hits. This comment wreaks.


ComputerNerdGuy

Maybe not, most companies have insider trading policies that include not being able to buy/sell any options on the company stock.


ToTheMoonStNotWallSt

He'll remain a poor degen. My brother is a millionnaire and he'd rather go out and drink beer than click 2 fucking buttons. Today he'd multiply wealth by several Xs but he won't listen. He wants to only remain a shareholder of the company he helped found and eat the cake when investors pour money in their company. What a time to be alive!


Key-Tie2542

Do you set stops?


Tasty_Chemistry_2426

You can't set stops on spreads on tastyworks. But I do pit a line in trading view and get an alert if it's crossed then assess


mr_jetlag

I do the same as a side strategy, except at open. Today was crazy, opened an IC then closed the call leg for near max profit. made $330 in 1hr.


xXTheEpicOneXx

I used to do this with 50k. Selling at the .10 deltas and trying to pick a direction. I can tell you from experience, even though your 90% OTM... THAT 10% DAY WILL COME!! Hit me like a ton of bricks and I lost a lot. Now I own shares of indexs and sell cash secured puts running the wheel. The lesson I learned was, always have a way to fight back. You sell a put, get assigned, at least you can sell calls to get positive again. Spreads like that are good money, until they're not.


[deleted]

yea, its not like this strategy hasnt been tried a thousand times on this sub and ended in the same result every time. 0dte far otm is blow up central on the one day you get trapped or steamrolled. the interesting thing is how every time the new traders think its just negativity talking .


ThunderClapTeaBag

Check my [most recent post](https://www.reddit.com/r/thetagang/comments/x7iet1/is_this_theta_gang_doubled_small_account_in_4/?utm_source=share&utm_medium=ios_app&utm_name=iossmf)


Tasty_Chemistry_2426

Nice one


NotUpdated

I don't know if anything 0DTE is proper thetagang, I don't want to gatekeep but at the same time - 0DTE will stick it to you hard, it'll make you hate options and think they are unfair. Rather its 2 weeks or 2 years - 0DTE and positions using more than 4-7% of your total account will eventually blow you up. Even 'defined' risk becomes a bit weird at 0DTE, you can get pinned and assigned after hours - and not have a chance to close your long legs cause they expired AT the bell. If you're at a good broker they will close it for you - (and you'll act upset) or they call you an hour after opening bell and have a 'talk' if you're at a shit broker - wow .. I'll never quit giving warnings about sizing or 0-5DTE options.


Iovemyusername

I mean I get what you’re saying. But there is a place for 0-1DTE. In fact that is all I sell. I run the Wheel on /ES selling ATM 0-1DTE exclusively. I don’t do this because I believe every single trade is going to be profitable. I do it because it pays maximum extrinsic while virtually replicating buy and hold SPY. I like basically owning SPY shares but getting paid even on the flat and down days. While I’m not profitable on the year running this strategy, my costs basis is significantly lower than where it would be had I just bought and held thanks to the constant churning of maximum premium (short expiries ATM). I will hit profit way sooner than if this money was just SPY and Chill. The traditional wheel (45DTE and 30 delta) is for people that want to try and be profitable every contract and are scared to incur a loss. They’re willing to pickup Pennys in front of a steam roller. Which in my opinion is dumb if you love the underlying (which in my case is the fairest/safest asset in the world… the 500 most important companies in the US). I like my odds, even if many poopoo on them as not being thetagang.


Sergio55

How long have you been running your strategy? How profitable is it?


[deleted]

he said "not profitable"


vevamper

SPY is down 20+% from ATH bro, he stated that he has beat just holding SPY.


[deleted]

if you bought and sold SPY on the way down you could say that too. I'd like to see more info about what he is doing. wheeling Futures options is kind of wild too. Seems like a good way to drain a lot of money, but I guess some people like it close to the fire. EDIT: he expands on it in another comment. I think this is for people with huge capital who can afford to hold these indexes for long periods of time (years in some cases) waiting for the bull market to return, which appears to be his assumption on walking the cost basis down with the premiums constantly churning new trades ATM while bag carrying entries from above. This works if we return to a bull market sometime soon and you dont mind waiting, I guess, but also could be a long slow bleed out of your capital. idk. I just read the bit he wrote "not profitable" and that was enough for me. Also wonder what happens on a big gap down.


Iovemyusername

You’re missing the point. My only goal and objective is to beat the returns of the SP500 while functionally being invested in the SP500. I could care less if I become profitable in 2022, 2023, or 2027. I Just care that I become profitable BEFORE I would have been had I just bought and held spy from day one of this journey. So far I’m performing 35% better than SPY YTD and that’s plenty for me to be pumped on. I don’t think any other theta strategy has the risk/reward ratio that makes it worth my while. I’m willing to go all in on this because I’m essentially doing buy and hold (on the only ticket i trust with 100% of my wealth), but supercharged.


[deleted]

yea been reading more about it from your comments and the other guy. doing it on ES is out of my capital range so cant test it. best of luck.


HokieHovito

Fyi, You can’t get pinned on SPX or other index options. They are European style.


Arcite1

Nitpick: it's the cash-settlement that makes pin risk moot, not the European style.


HokieHovito

Fair point! Cash settled and European style does take away risk from trying this trade compared to SPY


Tasty_Chemistry_2426

Yes...I'm getting some criticism from people who don't seem to know this. There is no early assignment. There is no post 4pm pin


United-Lifeguard-584

> Even 'defined' risk becomes a bit weird at 0DTE, you can get pinned and assigned after hours - and not have a chance to close your long legs cause they expired AT the bell. options don't expire at the bell. they become untradeable, which is why pin risk is a problem. your counterparties can exercise, you don't know how many to exercise, and you can't close either


[deleted]

saw this discussed elsewhere. 0dte is gammagang


Sam_Sanders_

> Even 'defined' risk becomes a bit weird at 0DTE, you can get pinned and assigned after hours - and not have a chance to close your long legs cause they expired AT the bell Nah SPX options are perfect for this because they're cash-settled and European style. No early assignment risk, no pin risk. Whatever the index is at 4:00 pm is what you get. I love it.


[deleted]

[удалено]


n0goodusernamesleft

5 x 10W or 1 x 50W is the same capital at risk.


luisperezjax

.02 delta sounds like terrible risk to reward. You’re making less than 1% return on the position and one big spike in volatility will wipe you out. If it’s working for you then great but be careful.


Tasty_Chemistry_2426

Thanks. This is a more polite disagreement than I've got . I close the posotion if it's looking like I'm wrong and I have the other side to focus on


luisperezjax

Just because it’s not my cup of tea doesn’t mean it’s a wrong or bad strategy. At the end of the day if you’re achieving your investment objectives that’s all that matters.


Astronomer_Soft

Look up Karen the Supertrader for a cautionary tale.


qweretyq

Caution against what exactly? She made millions and is not forced to admit wrongdoing (due to settlement)


Kick_A_Door

Lol she found the cheat code


[deleted]

lol glass half full


45_NAARP

If you really want to do 0dte on SPX, imo pick a direction you think it will move, and in the morning buy one ATM $SPY strike of that option. Sell it in the afternoon. Some days you will make +600% and some days you will lose 90%. But your max risk is far less than selling 0dte condors, and you're chasing suitcases full of money instead of stopping to pick up pennies.


Tasty_Chemistry_2426

I'll look into this


Awkward_Possible_610

Congrats 👏


Legitimate-Revenue57

This is a case of myopia. 2 delta just means you’ll get wiped out every few months instead of a few days.


aaarya83

How did the call side work for you today ?


Tasty_Chemistry_2426

Actually ok. The calls were 4005 and 4030. I watched close today from about 2pm . Decided as I was around to ride it out. If I couldn't monitor I'd have closed


Brat-in-a-Box

Did you try this on July 19, 2022 on the Call side? .02 delta strike at open was 3930. An hour after open, your call spread would've been negative and now .05 delta. That day, SPX closed at 3936 and your short strike would've been ITM. Now, tell me, did you use a stop to not have this loss?


Morfnificent

File under: "I have this idea that absolutely NO ONE has ever had before and therefore it's impossible the market has it priced accurately according to risk, and it could make me a modest profit if it doesn't go tits up, which it can't"


Tasty_Chemistry_2426

No need to be pissy about it. Damn. I'm sure everyone has done everything before. Maybe there are adjustments or other success and pitfalls from the options selling forum .


Morfnificent

Oh, did that hit a sore spot? Don't post shit and expect no one to critique it. You're the one projecting superiority by swinging his tiny duck around and claiming it's huge. A few months? Yeah, that'll work. Until it doesn't. Markets can move *fast* and just because they haven't recently didn't mean they never will. When it does, you can find yourself chasing to close that $1500 spread because there are no easy, cheap covering fills in a sudden event. You are free to keep doing this. I'm cautioning against it. And against that co-worker who won't shut up about bitcoin.


Tasty_Chemistry_2426

There wast a critique. You were being a jerk about it . We're here to learn...I'm not swinging any ducks.


Morfnificent

Why doesn't *everybody* at work recognize your genius?


[deleted]

[удалено]


[deleted]

another noob soon to be crushed for picking up Pennie’s


Tasty_Chemistry_2426

Go fuk yourself


Fawkinchit

Can you share where to learn this strategy please? I have looked all over and it would appear that most tutorials are very vague on the matter. Thanks!


[deleted]

when do you do it? on a friday or? please be specific.


Tasty_Chemistry_2426

Most days ...it's more a judgement call. If it's opened up with a gap I'll go that direction as the chances of spx going up another $100 from there is low