0dte

Discussion in 'Options' started by qlai, Dec 9, 2022.

  1. I don't know about OA's comm structure, but e.g. Tastyworks is pretty cheap - $1/lot, $10 max/leg, no closing fees. Lots of other places do $0.60 per. If you're a veteran, TradeStation has their "Salutes" program which is commission-free (outside of exchange and assignment fees, of course.)
     
    #11     Dec 9, 2022
  2. rb7

    rb7

    Agree.
    But slippages are included in their stats.
    They don't mention anything about commissions.
    A profitable trade can become unprofitable when commissions are added.

    I highly suspect that they didn't include them.
     
    #12     Dec 9, 2022
    zdreg and piezoe like this.
  3. On a low-leverage, more-or-less binary-outcome trade like an IC, that's not really the case; e.g., a ~20D 0DTE SPY IC with $2 wings is pricing around 0.70 right now. Even assuming $4 in fees, that's not going to affect things much. The worst case expectancy, comms included, would be 0 (67% * 66 - 33% * 134).
     
    #13     Dec 9, 2022
  4. cesfx

    cesfx

    Option alpha do not include commissions for what I understand. They actually offer some zero commission trading if you link broker through their bots. And I think I read in one of their pnl image from the op link that pnl didn't include commisions.
     
    #14     Dec 9, 2022
  5. M.W.

    M.W.

    Some of the stats in the blog point to some pfof execution business model judging from the historical pnl stats shortly after opening positions which are across the board negative. Hence my concern that trying to get filled better will most likely result in delayed execution and lower overall pnl than reported.

    But I question the overall edge in such trades, those pretty much are bets on binary outcomes.

     
    #15     Dec 9, 2022
    cesfx likes this.
  6. cesfx

    cesfx

    kind of double binary?
    I normally consider narrow verticals as binary
     
    #16     Dec 9, 2022
  7. Since ICs can only blow out on one side, the risk perspective should be the same from that angle.
     
    #17     Dec 9, 2022
    cesfx likes this.
  8. cesfx

    cesfx

    I am live testing one today lol

    I took it just before 12pm est, 3945-3985 breakeven points, 1.50 credit on 5$ wide
     
    #18     Dec 9, 2022
    BlueWaterSailor likes this.
  9. Sounds like me. "OK, I've heard your theory. Now let's actually put the pedal to the metal and find out." :)
     
    #19     Dec 9, 2022
    cesfx likes this.
  10. qlai

    qlai

    Is there a risk management for these, or it’s just - take quick profits or hold to eod?
     
    #20     Dec 9, 2022