The market had a bullish run up in the pre-market am today and it kept going until mid day where it turned flat. The Spy odte call options were trading heavily soon as the market opened as the bears struggled to find a foothold until the last 15 minutes of this intraday…
Spy 0dte Options 607 CALL
The chart above shows the Spy 0dte options 607 call strike (Monday Dec 16, 2024), now let’s dive into the best trade with this 0dte option. As you know, the options chart follows the Spy and ES with some slippage due to theta decay, so trading ATM (at the money) or near OTM (out the money) is best unless there is a lot of pressure from traders showing otherwise.
The market sold off on Friday as expected making way for a bull run today. Opened strong with today’s PMI data release.
Entry Point:
From the chart above, a good entry point would have been around the .22 price right before the 6:45 am mark after a continuation to the upside pre-market that started to extend the indicators. The Spy then flattened out around mid-day. This early morning trade could have been best taken at the 7:20 mark as well.
Exit Point:
The best overall exit point would’ve been around the .73 mark at 7:32 am (pst) or could’ve held through till 10:30 am (pst) for the same or a bit more. The chart indicators (moving avg, bollinger bands, RSI, CCI) on the Spy & ES were over extended to a degree, but the market felt like it was taking a breath as it just pushed up higher. The volatility was losing steam as the day went on.
This 0dte options trade (CALL) scenario represents a 3.3x, meaning a 330% profit could be made from this quick 47 minute trade. The other CALL strikes OTM (out of the money) were lagging indicating the bull run was about to reverse. Spy was caught in a flat range and didn’t break through to the downside until the last minutes of the day.
Profit Example:
- 100 contracts bought at .22 ($2,200 investment)
- 100 contracts sold at .73 ($7,300)
- Minus $2,200 investment = ($5,100)
- Minus 100 contracts cost at .65 ea ($65)
- Total Profit: $5,035
Key Things to Watch:
- Watch the charts on Spy, ES, and the option strike price simultaneously, make adjustments or change 0dte options strike prices if need be.
- Technical indicators on SPY supersede all else when trading their option from their option chart like above. (same for other stock symbols)
- Keep on eye on Level 2 (Bookmap heatmap is best) signaling demand on the ask/bid side (try to stay under 200 – higher = slower fill rate).
Conclusion:
Spy had most of it’s upside in the pre-market today, it looked like a bearish scenerio was about to take place but kept going up. The 5-minute, 15-minute, and 1-hour chart time frames shows the “checklist” scenario with the 1-minute giving key insights for fast in/out scalping.
- These types of day trading scenarios happen every day when buying and selling odte options (Spy and QQQ – only-offer-zero-day-to-expiration options at this moment). The possibility of grabbing a trade like this are very possible almost everyday.
If you miss it today, you may be able to catch it tomorrow…
