SPX 0dte Income Trading - Feb 16’22 4400/4395 Bull Put Spread
SPX 0dte Income Trading - Feb 16’22 4400/4395 Bull Put Spread
💡 Feb 16’22 4400/4395 Bull Put Spread
$80 Premium Received (per contract)
81% Probability of Profit (at entry)
10:33 AM Time of Entry
The fact that we gapped higher yesterday and have moved away from the large short strikes, the 4300, 4350 and 4400, these open puts are OTM and delta will be moving towards zero the further price moves up, and in turn this will force dealers to cover short hedges meaning dealers will become buyers as puts deltas contract.
That being said, the market leading into OpEX has significant potential to melt up.
Although the extent will be dependent on whether traders close their hedges or roll them into the future.
PCC is 0.91 at this time, after reaching a high of 1.4 yesterday, so we are seeing a reduction in puts.
FOMC minutes are out at 2PM which could create some volatility. Leading into the announcement markets continue to tread water.
WHAT IS 0DTE TRADING?
0dte or zero days to expiration refer to the last trading day for an option contract. The Chicago Board Options Exchange ( Cboe ) lists weekly options on the S&P 500 Index (SPX) with expirations every Monday, Wednesday, and Friday. Since most options expire worthless we take advantage of this by selling credit spreads to collect premium. Our option trading strategy allows us to profit if the market moves up, down or doesn't move at all.
✅ Consistent Cash Flow
✅ High Probability of Profit
✅ No Overnight Risk
💡 Feb 16’22 4400/4395 Bull Put Spread
$80 Premium Received (per contract)
81% Probability of Profit (at entry)
10:33 AM Time of Entry
The fact that we gapped higher yesterday and have moved away from the large short strikes, the 4300, 4350 and 4400, these open puts are OTM and delta will be moving towards zero the further price moves up, and in turn this will force dealers to cover short hedges meaning dealers will become buyers as puts deltas contract.
That being said, the market leading into OpEX has significant potential to melt up.
Although the extent will be dependent on whether traders close their hedges or roll them into the future.
PCC is 0.91 at this time, after reaching a high of 1.4 yesterday, so we are seeing a reduction in puts.
FOMC minutes are out at 2PM which could create some volatility. Leading into the announcement markets continue to tread water.
WHAT IS 0DTE TRADING?
0dte or zero days to expiration refer to the last trading day for an option contract. The Chicago Board Options Exchange ( Cboe ) lists weekly options on the S&P 500 Index (SPX) with expirations every Monday, Wednesday, and Friday. Since most options expire worthless we take advantage of this by selling credit spreads to collect premium. Our option trading strategy allows us to profit if the market moves up, down or doesn't move at all.
✅ Consistent Cash Flow
✅ High Probability of Profit
✅ No Overnight Risk