The market struggled to rally today, so the bears were in charge for the most part during this low volume, choppy trading day. Let’s dive into what happened on the Spy put options…
Market report: Spy 0dte Options 606 PUT
The chart above shows the Spy 0dte options 606 put (Dec 12, 2024), now let’s dive into the best trade possibility with this odte option. As you know, the options chart follows the Spy and ES to a degree with slippage thanks to theta decay so trading ATM (at the money) or near it OTM (out the money) is best.
The market was bullish yesterday and turned down slightly during pre-market hours. Todays PPI data dropped before the open and it was as expected, nothing extraordinary.
Entry Point:
From a technical aspect, a good entry point would have been around the .30 price at the 10:25 am pst mark. The Spy continued to have downward pressure, but had a small spike at 11:00 am (pst) which may have caused a stop out. If you held through that (the indicators were reading bearish), the profit taking was very good!
Exit Point:
The best overall exit point would’ve been around the 1.20 mark. The chart indicators (moving avg, bollinger bands, RSI, CCI) on the Spy & ES were choppy but signaled a more bearish intent.
This 0dte options trade (PUT) scenario represents a 4x, meaning a 400% profit could been made from this quick 1-hour trade. Since it was slow moving, the pain of watching it was draining.
Profit Example:
- 100 contracts bought at .30 ($3,000 investment)
- 100 contracts sold at 1.20 ($12,000)
- Minus $3,000 investment = ($9,000)
- Minus 100 contracts cost at .65 ea ($65)
- Total Profit: $8,935
Key Things to Watch:
- Watch the charts on Spy, ES, and the option strike price simultaneously, adjust accordingly.
- Technical indicators on SPY supersede all else when trading their option from the chart like above.
- Level 2 points to signals regarding demand on the ask/bid side (try to stay under 200 – higher equals harder fill rate).
Conclusion:
A choppy & weak volume Thursday, from what I’ve witnessed Thursdays are mostly bearish. The 5-minute, 15-minute, and 1-hour chart time frames paint the overall scenario with the 1-minute giving great insights for fast scalping.
These types of day trading scenarios happen every day when buying and selling odte options (Spy and QQQ – only 2 that offer zero day options). The possibility of snagging a trade like this multiple times during the intraday day is very possible.
If you miss it today, you may be able to catch it tomorrow…
