When closing earlier for profit your are limiting your profits, you're losses will be the same.. The cheap wings will limit your margin (be careful not to overtrade!!) but still you will have big losses..
That applies to every single strategy and has nothing to do with straddles, or flies, ICs, long options of any other strat, so I'm not sure what your point is.
I will chime in here . My 2 cents Doing 0dte spx trades since a long time now. Also I let them expire unless they get itm when I have to figure out wtf to do the. Earlier it was mon wed Friday. Since may of this year it’s daily. I am profitable. Beat spy qqq last 2 years and am up ~ 30% Ytd this year. I do only bear call spreads. Seldom do any puts. Now carefully listen to my next statement. I make more money doing bear call spreads when the market was rising. So post March 2020( when I decided to go 100% cash). I started deploying ( I had to put money to work) and it worked great. So need a rising market to make $$ right now. It’s so volatile . And bear market rallies can wipe me out. I have significantly reduced my bets in current time. Best thing of this strategy is I sleep every night like a baby since I am 100% cash. Fuck put side. I am fine with leaving lot of money on the table. ( iron condor ) you get a free trade for same margin on put side. No thanks. I ain’t doing puts. Only call side..
Well Said. Trading since 2 decades has taught me one thing. There is no fixed flat method to make $$. Ha ha. It works till it doesn’t. As tyson said. “ everyone had a plan till they get punched in the face”. Selling options. Uff. So ducking dangerous. As they say also “ picking up pennies in front of a freight train “
The point is that taking profits early and don't cut your losses will lower the overall P&L. If you want to manage the position its better to limit your losses and let your profits run..
So do you hold every single option trade you open, until expiry time? Surely, you don't close any trades early, even if they hit your profit level, cos then you are limiting your profits, and its better to limit your losses and let your profits run.
Sometimes i closes positions early to relieve margin. Most of the time i let them expire or buy them back for 5 cent close to expiration. I don't have a profit level, only risk levels..
So you are doing the very thing that you are arguing against here. Riiiiiight. That makes sense. Seriously, the amount of self-contradicting and pointless arguing here is laughable.
Hello Matt, Is the first graph, 0dte straddle closed 14min before end of day, and second graph let to expiry? are they batested on 0dte entry? I have started exploring your backtesting wheel and scanners yesterday. What parameters can I set, to backtest a specific time of the day. Like your second graph of long straddle 0dte, last 14min of the day? Is it all 0's for 0dte in the "days to expiration" parameter window?