Use This Tool To Help Evaluate Your 0DTE Risk | 0DTE Crash Course
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- Опубликовано: 9 окт 2024
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Could you do a followup? Get the feeling there's some super useful info here, but finding it hard to understand how to apply. Real step by step examples would be super useful.
I agree. I was completely lost throughout most of this...
I think I know how you could use this. If the 30 day is starting that the days move will be say....$2.50, but the 1 day is saying the move will only be $2, you could sell an option $2 away from the price instead of $2.50. This 18-20% difference in expected move edge could be cashed in for more premium and by extension increase your p/l and/or w/l ratio.
Is it correct to divide by sqrt(365) if placing the trade at market open? Time passes overnight. Expected move at market open should be (price at open)*(IV/100)*sqrt(0.27/365), where 0.27 days expresses the 6.5 hours remaining to expiration. The 83% reported later in the piece is based on placing your trade at the close of the previous trading day.
To those that have ears to hear, let them hear… Great information. Thanks
Incrementally useful for trade setup but Tasty needs more intraday mechanics, indicators and yes technical for O dte. Most of my challenge is once I'm in I'm in. I need my 6.5 hr survival kit. Guessing answer will be take 20% profit. Get out b4 gamma smacks you. Ironically, i think this could be the basis for a good intraday indicator. I've seen 30 day vix influence my 0 dte. I've seen vix1d influence. How they interact is still foggy.
I'm still digesting the practical applications of the video, but if you are looking for gamma information I feel that the Spot Gamma service is highly informative. I don't work there and I'm not paid to push them. I just feel they do a good job on intraday gamma analysis, which could help avoiding problems.
That was great information, so knowing the difference between the ODTE IV and the 1day Vix gives a better idea when to sell options verse when the IV wouldn't make the trade worth taking, technically speaking.
And then combining that approach with the 0/30dte diagonals
This should have been followed up with some real world trade examples illustrating the different IV ratios. Just sayin.
I may be way off here, but if you go back to slide 5, what this tells me that the arbitrage opportunity is using strikes at 1x. At 1x expected move, the 0DTE ATM IV is materially overstated at 82% vs the theoretical 68%. You could give yourself some confluence on any particular day by referencing the VIX 1D as it is a good predictor of theoretical. Once you move to 2x or 3x expected moves, though, the delta quickly reduces between these. Thoughts?
I think you are bang on here
Agreed
No because the percentage delta is approximately the same. You’re thinking in absolute values
That may be the most confusing video I have ever seen on this channel. And I tried hard lol.
haha agreed
Had the same impression. I was lost
I watched it a couple of times and was still lost...
I wish they would actually show the examples they were talking about. So lost.
Watched it three times. I get the concept. But no idea how to apply it...
I'm missing how you can use the VIX1D to choose the strike. I get that it can be used to gage which days have more advantage, although a range of what's a good value vs bad would be nice, but how can it be used to compare one strike against another on the same day? Should you go higher delta on better days and lower on worse?
This was a great and very useful study!
Since VIX 1D uses business days and business minutes vs calendar days, shouldn’t we be dividing by the square of 252 rather than the square of 365?
I was wondering this too. Would love to see how this changes the results
@@AmitDangerPatelhas anyone emailed Tasty about this to see what the research team said about using 252 instead of 365?
I checked this for one day and using square of 252 made the 1dte vix nearly the same as the vix. Has anyone emailed Tasty about this?
No I have no emailed them but thats what my rough calcs showed also (i.e. that error could invalidate the essence of the video if were correct)
😂 I I'm struggling to follow through.😅
I agree.
This was awesome info and very useful for me. Thank you
it Tom does play by play, and middle guy Antoin does color commentary, what does Bob opps Tony do ? Who is Dandy Don, who is howard cosell, and who is al Michael ? I am so confused ! :)
... and if you are buying options instead of selling the opposite must be the case also...?EI the overstatement is small or non existent
When you are converting VIX and VIX1D into a daily percentage expected move, I know that measure is already annualised hence the need to use sqrt(365) as the time factor, but would that also be the same factor that you use to convert the 0DTE ATM IV into expected move?
Yes
Amazing informations. Thanks a lot!
You better start 0DTE, once something is overstated, because it is overstated. Not very good presentation. Where are the real life examples?
It is confusing now what is actually the "tool" which will reduce the 0DTE risk by 10x??!
So using the platform how do I find the VIX 0dte and VIX 1 det to compare?
Just go to the trade tables for the different expirations and note the expected move for each expiration.
@@gregkeen4907no the VIX 1 day is its own index and not shown in the platform. Google VIX1D
I really like the research, but not clearly showing how to use the research is not super smart.
Im not an expert, but Im pretty sure that the IVx of the 0DTE is calculated with the ATM IV and so you could theoretically calculate the standard deviation yourself that supposedly wins 82%
But they already put it in the option chain so use that
My take was that it's best to sell 0DTE options when/if one can determine that they are overpriced when compared to the VIX.
Tasty please share this in layman’s language, so that we understand what we oils be the next steps. You guys rock.
@@r.alexander9075You can't calculate when Fed chair Powell speaks and makes the market go crazy and overshoot any prediction you think you can make.
Isn't trading more about direction and timing? Finding levels of s/r and then timing your entries? So why is it necessary to get bogged down in all these details about IV, delta, etc?
If you're new to the Tastytrade style, they trade almost entirely based on IV and statistics, not direction. Sosnoff does not believe there is an edge in trying to time the markets. He is a believer in the efficient market hypothesis. This is oversimplifying it a bit, but it's hard to get the nuance in a RUclips comment lol. Tom is highly successful and trades mostly based on stats IV and probability, not direction. If you have your statistics and probability correct, then you do not need to time the market or get direction right in order to make money long term.
Investing is more about timing and direction, trading is more about statistics and probabilities. Tasty generally does not do videos on investing, they are strictly about trading and finding edges to exploit the market before, during, and after a trade.
@@GoldenAura32 I don't know if I have ever seen Tasty look at charts or indicators. You need these for trading and investing. Yet Tom & Co. only talk about delta, IV, and that stuff. I am saying that study charts and indicators to get a sense of direction and timing and then enter your trade.
Makes sense guys! Thank you!
Pls explain how youre going to apply this?
if the VIX1D is lower then the IVX for the zero day expiration, there is an arb vol trade of sorts. one of them is over or under priced@@growontap
This title was a complete click bait
Ummm... sure I got that totally
BLA BLA BLA, REAL trading examples guys......
Meh... This is very very valuable information, if you don't know how to use It... Stay away from trading...
Basically, watch any gap up in VIX to buy ZDTE calls. Too much thinking and over analysis.
No, not at all actually. They are talking about SELLING options not buying them. If you buy them instead you are going to overpay on premium.
Darnell I will take "white people " for $200. Darnell "Are you sure about that Doug "?
Well what happened was 😂
while i appreciate your willingness to share information and strategies, some of the jargon chit chat etc takes away from the content. I would suggest that keeping it simple and to the point in these videos helps us know the information and stay for the duration of the video rather than skip after a few seconds or minutes.