The market had a small bull run in the am today, but the bears were on fire! The Spy put options were eaten up by the hungry bears early on…
Market report: Spy 0dte Options 605 PUT
The chart above shows the SPY 0dte options put strike (Dec 13, 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.
The market was rather flat yesterday with a bearish tone. Typical Friday today with most of the volatility performing at open then lost steam after power hour.
Entry Point:
From the chart above, a good entry point would have been around the .35 price right before the 7 am mark after a small pop to the upside that over extended the indicators. The Spy then got eaten by the bears for most of the day with small scalps here and there. This was a banger, a trailing stop would’ve been ideal in this situation.
Exit Point:
The best overall exit point would’ve been around the 2.00 mark at 8:10 am (pst) or could’ve held through till 10 am (pst). The chart indicators (moving avg, bollinger bands, RSI, CCI) on the Spy & ES strongly signaled the downtrend.
This 0dte options trade (PUT) scenario represents a 5.7x, meaning a 570% profit could be made from this quick 1-hour trade. The other PUT strikes OTM (out of the money) were ragging strong as well and with larger profit possibilities. But those are very risky which needs eyes on at all times along with a stop loss set in place.
Profit Example:
- 100 contracts bought at .35 ($3,500 investment)
- 100 contracts sold at 2.00 ($20,000)
- Minus $3,500 investment = ($16,500)
- Minus 100 contracts cost at .65 ea ($65)
- Total Profit: $16,435
Key Things to Watch:
- Watch the charts on Spy, ES, and the option strike price simultaneously, make adjustments or change strike prices if need be.
- Technical indicators on SPY supersede all else when trading their option from their option chart like above.
- Keep on eye on Level 2 signaling demand on the ask/bid side (try to stay under 200 level 2 – higher = slower fill rate).
Conclusion:
Spy chewed down about 5 points today, these end of week trades are always exciting. The 5-minute, 15-minute, and 1-hour chart time frames paints a pictured scenario with the 1-minute giving great 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…
