---
title: 'Zero DTE Options: Turn a Losing Trade into a Winner'
source: 'https://youtube.com/watch?v=c49FJM6UDvo'
video_id: 'c49FJM6UDvo'
date: 2026-07-12
duration_sec: 732
---

# Zero DTE Options: Turn a Losing Trade into a Winner

> Source: [Zero DTE Options: Turn a Losing Trade into a Winner](https://youtube.com/watch?v=c49FJM6UDvo)

## Summary

This video explains how to trade zero DTE (zero days until expiration) options, focusing on an Iron Butterfly strategy that can turn a losing trade into a winner. The presenter walks through a real example on the SPX index, showing how to adjust the trade as the market moves.

### Key Points

- **Zero DTE Options Overview** [00:00] — Zero DTE options expire the same day they are traded, providing same-day results and eliminating overnight risk.
- **Three Benefits of Zero DTE** [01:37] — 1) Result known same day, 2) No overnight risk, 3) SPX and NDX have daily expirations, allowing frequent trading.
- **Index Options Basics** [03:07] — Call options pay $100 per point above strike; put options pay $100 per point below strike. Example: SPX at 4032, 4000 call pays $3,200.
- **Iron Butterfly Setup** [04:36] — On April 28, SPX opened at 4129. Sold 5 calls and 5 puts at 4140, bought 5 calls at 4170 and 5 puts at 4110. Net credit: $7,575.
- **Adjustment: Call Butterfly Roll** [07:59] — When SPX hit 4155, bought back 4140 calls, sold 10 of 4170 calls (net short 5), bought 4200 calls. Cost reduced credit to $3,315.
- **Final Result** [09:59] — SPX closed at 4169.48. All options expired worthless. Profit = $3,315, a 44% return on capital in one day.

### Conclusion

Zero DTE Iron Butterfly strategies allow traders to profit without predicting market direction, by adjusting positions based on market movement. This technique can yield significant returns in a single day.

## Transcript

zero DTE options trades can be super powerful and it pays to know how to trade them in this video we'll give you a quick overview if you're new to them
and then dive deeper and show you a specific strategy for trading zero DTE options that can turn an initial losing trade into a winner I'm Mike Bella Fury
and we're one of the top proprietary trading firms located in New York City and proud to have developed seven and even eight figure Pere Traders we hope you agree this is the top YouTube channel to help you grow your trading
[Music] account hi I'm Seth fryb and I'm the
head Trader of SB capitals options trading desk here in Manhattan and many of the Traders on our desk are trained to trade in a daily time frame and so naturally option strategies that have a one-day trade duration or of particular
interest to train professional options Traders and so there's a world of options strategies that are broadly categorized as options income trades and these strategies can be implemented over any time frame some options income
strategies can be initiated and concluded in a single day and others can last for months what we'll be teaching you today is a one one day trade what's called a zero DTE trade which stands for zero days until expiration meaning that
the options contracts will be trading will expire on the very same day that we're initiating the trades and so there are three great things about zero DTE
all unlike with swing trades or even outright investing in stocks the result of the zero DTE trade is known that day because the options expire the same day
that the trade is entered into and so by the end of the day you'll know the final value of each option second of all the trader has zero overnight risk for the aren't exposed to huge international events overnight earning surprises bank
failures and all the other stuff that keeps Traders literally up at night and finally unlike in the old days when there were options expirations only once per month Believe It or Not indexes like the S&P 500 Index known as the SPX index
or the NASDAQ 100 known as the ndx both of those have expirations every single trading day so that basically you could execute this strategy repeatedly day after day 250 times a year if you want instead of like the old days where you
only had 12 bytes at the Apple a year and so today we're going to be going over one very simp simple Zer DTE strategy now in order to explain how this strategy works we need to make sure that everyone watching this video
understands how index options work so we're going to do a really quick review of them and then we'll jump right back into the details of the strategy and so the best way to understand index options is to think of them as bets what are
known as call options pay off if an index closes above what's known as the strike price of the option on the day that the option expires if the index does close above that price on expiration day then the call buyer gets
$100 per point that the market closes above that call strike price a put option is the exact opposite it pays off if the market closes below the strike price of the put option again $100 per point that the market closes below the
strike price of the put so for example if an index closes at 4032 then the 4,000 call would pay $3,200 as you can see from the calculation because the index closed 32 points above the strike price of the call which is
4,000 however the 475 call would expire worthless as the index didn't close above 4075 so the call seller just Pockets the premium and the puts are just the opposite if the market closed at 4032 then the 4075 put would be worth
$4,300 because the market closed 43 points below the put strike price of 4075 but the 4,000 puts would expire worthless because the market did not close below the 4,000 strike price with that in mind let's head back to April
28th Friday of last week and as you can see the SPX index opened that day at 4129 and so let's say that around 10: a.m. that day we pulled up the options
chain expiring that day and we picked the options that are closest to the money the 440s and we sell five of both the 4140 calls and and the 4140 puts expiring that day and then for protection we move
up 30 points to the 417s and buy five of those calls and move down to the 4110 and buy five of those puts and so when an options Trader sells a call and a put
option at the same strike in the same expiration and buys a protective call and put options equidistant from each other above and below the short options respectively that formation is what is known as an
Iron Butterfly strategy and it's one of the many option strategies that can be implemented in a zero DTE a one- day time frame okay so now let's analyze the cash flow of this transaction because it's very important to understand how
we're going to manage this trade and so first off we receive a price of 690 for the five calls we sold at 4140 and remember index options pay off $100 per point that the market Market moves past its strike price so you multiply that by
100 and we sold five of them so the total premium we collected for the short calls was $3,450 the short puts using that same calculation brought in $5,450 and then for protection we had to
$1,060 respectively and so when you net it all down there's a cash inflow positive cash flow on the trade of 7,500 $75 which comes right into your account
and your broker will require you to have at least 7,425 in your account to make this trade in the first place so where do we go from here well let's do a little bit of calculating to understand where we might take action well we
executed five options at each of the four strike prices that we we showed you right and so if we had only executed one option at each strike we would have brought in one fth of the amount of the credit or
$1,515 as you can see right well remember those calls we sold and those puts we sold we're obligated to pay $100 per option for each point the market goes past the strike price of those options so for instance the market moves
up $155 points up to 41555 then each of the calls were sold or obligated to pay out $1,515 and the same for the puts on the downside those are obligated to pay
$1,515 if the index closes at 42485 for the same reason and so many options Traders would at that point take action to protect the position so that
we don't lose money on the trade this is all going to become a little clear when we show you what happens next and that is as you can see the SPX index went out up almost exactly to our upside adjustment point at 4155
5 and so it's time for action and the specific action we would take in this case is to execute what's called a call butterfly roll which in this case involves buying back all of the 4140 calls selling 10 of the 4170 calls
turning a five lot long position into a five lot short call position and then buying calls further points up five long call options up at 4200 and so by the End of the Roll the position looks like where there is no position at 4140 that
got bought back but there's a new five lot short call position at 4170 as we mentioned because we sold five more of those than we had long originally so the position actually becomes a short call position and then of course we have the
new long position up at 4200 and so the put side hasn't moved at all but we did move the call side up to those two strikes and so this new position is called by options TR Traders an iron Condor because the short calls are now
above the short puts whereas in the butterfly formation they were at the same 4140 strike on both the call and put sides and so keeping score the cash flow after that butterfly roll you can see from this calculation that after
paying for the 4140 calls to close them selling 10 of the 4170 calls to open up that new five lot short position and buying those cheap 4200 calls for
protection you can see that when you crunch all the numbers the roll had a cost to it and we ended up having to spend more than half of our initial cash flow on that rooll bringing the positive cash flow down to
3315 okay so at this point now let's move to the end of the day so that we can calculate the final results of the trade because remember these options are zero DTE so they stopped trading at 400 p.m. eastern time and as you can see the
index closed at around 4169 48 just pennies below the 4170 call strike that we had rolled to and so now we can calculate the results of the trade which is pretty easy because as you as it turns out all of the options expired
worthless why do I say that well both of the calls the short 4170 and the long 4200 calls both expired above the SPX closing price of 4169 48 so those have
no value value because calls only pay off if the index closes above their strike prices and for the exact opposite reason because the index closed way above the put strike prices of 4140 and 4110 those also expire worthless causing
both of the puts to expire worthless because they don't pay off unless the index closes below their strike prices resulting in all four options expiring worthless which is actually really good news for this trade why
because then that cash flow that we kept after the butterfly roll well we just get to pocket that as our profit which turns out to constitute a 44% return on our original capital in the trade in just one day and so what I'd like you to
take away from today's video is the fact that there are techniques for trading options that can work beautifully within the one day time frame of most day Traders and the best part is that you don't need to pick a direction for for
the market that day you can simply enter into a butterfly trade like we did in this case and then adjust the trade as the market tells us where it's going to go that day instead of us predicting it and in many cases we can take home a
solid profit within that one day time frame prot Traders are aware of these kinds of zero DTE strategies and use them all the time and now you have an idea of how you might be able to incorporate these ideas into your
but we have more for you click on the video appearing on your screen right now if you want to learn the secret to faster cash flow from the covered call
option strategy