0DTE specialist | Helping traders understand options through real trades, not theory | Daily market reads | NFA
Joined March 2021
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0DTErs: Today’s premium decay feels pretty normal.
Sold a 16d IC for $5 at entry. Thirty minutes in, SPX is still near the opening price, and the premium has dropped to $4, or 25%.
Not too fast, definitely not too slow either.
The 0DTE IC held up pretty well the day after the Fed, unlike other Thursdays on average.
A 20Δ/$20W IC with a 25% target earned more, won more often, and had a smaller tail than on a normal Thursday.
Held to expiration, both groups lost money and had similar tails.
0DTErs:
Thursday today, the “worst” day for 0DTE ICs on paper, and the day after the FOMC decision. I ran a quick study on $SPX and 0DTE ICs.
Most of the extra move happens before the open.
The Thursday after an FOMC decision usually opens with a bigger gap than a normal Thursday. That gap has widened since 2022.
After the open, the day looks pretty normal.
Kai retweeted
Look at the S&P 500's biggest movers:
🟢 $VRT +16.5% | $ORCL +10.6%
🟢 $SNDK +7.7% | $MU +5.9%
🔴 $FFIV -20.4% | $CSGP -14.0%
🔴 $CHRW -11.1% | $LII -10.6%
Here's what caught my attention:
7 of the 10 biggest gainers were technology stocks, including several tied to AI infrastructure and semiconductors.
But technology also produced the day's biggest loser: $FFIV , down 20.4%.
For traders, that's the interesting part: Being in the right sector doesn't guarantee you're in the right stock.
And on a Fed day, individual stocks can move far more than the broader market suggests.
@tastyliveshow
0DTErs: FOMC today and one thing to remember:
In general, the SPX 0DTE IC premium barely decays before the announcement.
Still added a couple of neutral 16d ICs this morning with real money, just for testing. 37 minutes in, I made 20 cents per contract after the market came back to the midpoint.
That’s a huge win for an FOMC day, right lol?
Kai retweeted
Imagine opening a restaurant.
Your restaurant currently generates $1 million in annual sales.
Business is growing rapidly, so you sign agreements to rent kitchens, equipment and facilities that could cost you $12 million over the coming years.
You're assuming future sales will increase enough to justify those commitments.
That might work beautifully if the restaurant keeps growing.
But what happens if growth slows?
You still have expensive commitments to honor.