[00:02] >> Yeah, that's what uh really was a wow moment for me. For around $5,000 capital deployed on a daily basis, I've seen results from a beginning of the year around 1,000% return. >> 1,000% return. How do you calculate
[00:18] that? Today, we present the 0DTE options strategy with 12 different strikes. Boy, is that a commission eater? It is set up to be fully automated, and
[00:31] the backtest shows very solid results. Here is uh Saurabh Khurana. >> Hey, John. Really looking forward to discussion on the butterflies. >> So, give us the 42nd version of your
[00:45] for you. >> The Skyline strategy evolved from thinking about different types of standard structures condors, butterflies, credit spreads, and all of them having certain edges and
[01:02] and all of them having certain edges and and uh pros. But what I thought was, can we build a risk profile and a payoff map that can stand the withstand the market conditions these days and help us generate the outcomes we are looking
[01:15] together. So, that's what the Skyline strategy is. butterflies uh that are put together to generate uh payoff and risk profile through our engineering methodology.
[01:29] >> And uh we will dig into all the details of this uh Skyline butterflies strategy, but tell us first a little bit about yourself, especially as an options >> From a career standpoint, I have been a technology and a product leader who has
[01:44] built uh several different uh platforms and smart homes, smart buildings, connected devices, health care. Uh from an options trader standpoint, uh I have been trading options for almost more
[01:56] than a decade. I've always kind of been attracted towards the options because of the the the payoff profile, the risk management they provide on overall portfolio, and also from an income generation standpoint. So, I have traded
[02:12] many different types of structures and different types of strategies in from option trading standpoint. >> Where are you located? >> I'm located in Twin Cities in Minnesota, USA.
[02:25] >> Very good. We will dig into all the details later of this trade. There's a lot of details to keep track of here, but I think we should start with the the basics. First of all, what are you trying to
[02:39] achieve with this Skyline strategy? >> The key problem that I was trying to >> The key problem that I was trying to address as I was trading many different strategies like credit spread, butterflies, iron condor, calendar
[02:53] spreads, was all of them were had a good payoff profile, but when the market conditions change suddenly, the payoff profile was lot different from what I
[03:05] entered the trade into, and multiple reasons for that. The market in 2025 and 2026 specifically has moved around a lot, which has impacted from stop loss triggering to some psychologically getting emotionally
[03:22] exiting a trade sooner than we should exit. So, that thinking led me to think from a more of a engineering lens on how I can design a framework that can yield strategies that can like Skyline that can withstand this market
[03:38] conditions. When I have heard common phrases from people in the trading room, suddenly the market moved, and I ended up closing the trade. Or in my
[03:50] strategies, I have also used SPX as the instrument and that there's a reason why I use SPX because it is an instrument that is cash settled and there's no assignment risk and it has is easy to model from a payoff and
[04:03] risk profile. So, that's what led to designing and building the skyline strategy. >> Um before we go into details, we should you know, the core trade in this strategy is a butterfly trade.
[04:17] And what is a butterfly? >> So, butterfly is in a simple terms has a tent type of a profile with a peak payoff at the center of the tent. For a
[04:29] normal butterfly in a SPX, you would open a trade let's say if market is trading at 7500 and you want you think the market will close there, you will open like a 30-point butterfly at 7470. You will buy
[04:42] a strike, you will sell two strikes at 7500 and you'll buy a strike at 7530 at one strike and and you're you would pay a certain amount of debit for a butterfly and then that will can result in a large payoff if butterfly remains
[04:57] above the payoff profile or in the payoff profile region. And if it pins to 7500, your money could double, triple or depending on amount of debit you paid. >> Maybe we should take a quick look at how this profit loss tent compares to some
[05:13] there. We have a slide showing some of the different structures here. >> As we look at different structures in the market, there are common structures like butterfly we
[05:25] already talked about. There is call spread or a put spread similarly which is a directional bet where you put some amount of debit and if the market moves beyond that debit in that direction and and the payoff is
[05:38] beyond debit, your trade is profitable. Similarly, double calendar you spreads which you sell put side strike near dated and a sell a call side strike near dated and buy a a
[05:53] far dated call and put put strikes. An iron condor has somewhat similar concept that as butterfly but it is more has a flat plateau. All of them have either a debit or a credit profile
[06:08] but how I look at this is in the end of the day what money can I lose if my trade doesn't end in the zone that I am in the standpoint. And what I call that is capital at risk or car.
[06:23] Which is very critical metrics that I use as I design the skyline which basically basis of all these strategies that are in the market to design the structure but also keeps the car concept in context so as I
[06:39] put on multiple butterflies what I want to ensure that the car doesn't turn out to be too large. Generally speaking my car might be maximum. With a bigger payoff profile and better
[06:55] risk management and so so that's the key high level concept market. >> So and let's take a look at an example a trade of your skyline with the four butterflies. John here we have I have
[07:12] preset up >> four butterflies with butterflies that are on the left side skyline structure. So the how the butterflies are set up
[07:25] the three butterflies starting from the left which have the higher peak 25 wide butterflies and the butterfly on the rightmost side that is more towards the rightmost side that is more towards the market going up is on the is a 20 wide
[07:39] butterfly. The key aspects on how the structure is formed from an engineering standpoint is there is a floor at the end of the overall
[07:51] structure. So, there is a floor of five which acts as an insurance in case the market suddenly moves out of the range. And then And then there is an overlap between the
[08:04] left two butterflies of 10 point in case which reduces the valley if market ends up in that zone. And then there is an overlap of five points between the butterflies two butterflies in the middle which has a deeper valley. And
[08:18] then there is an overlap of five uh 10 points on the rightmost two butterflies which are 25 point and 20 point. The way the trade is instantiated it's basically opened early in the morning right after market has opened
[08:35] and the the starting point of these butterflies is at the deepest valley center point. And that's where I start the butterflies and overlay all these the butterflies and overlay all these butterflies in this sequence.
[08:48] >> And we will get into the details of this entry mechanics and very soon. But just to be clear, this is how this would look at the end
[09:00] of at expiration, right? Where you have some profit tops but also some profit loss values so to so to values so to speak.
[09:12] >> Exactly. Yeah, so this is the at the close of the market if what the profile would look based on where SPX closes at. >> Before we go into the details of how you set up this trade, how you exit, and how
[09:27] you manage them, maybe we should take a quick look at the back test you have quick look at the back test you have done in Option Omega after after test. >> Yeah, John. So, as you look at this back test
[09:39] uh at a high-level summary, at a high-level summary, starting capital of 5,000 with two contracts over all of this structure, the ending capital is 78,956,
[09:56] which is almost 297% CAGR and a MAR ratio of 5.5. The drawdown is showing slightly on the higher side, which can be managed by reducing the number of contracts that you are trading in this strategy. If you
[10:10] trade one, then the drawdown would be 27,000 and uh 27% and and the ending reduce by half. So, it based on the risk profile people have and amount of
[10:22] capital and capital at risk they want to deploy on a daily basis, this can be fine-tuned. If this can also be traded on excess speed if needed, and that can even reduce the further capital needed to trade this strategy.
[10:34] needed to trade this strategy. >> Overall, it's a pretty smooth >> Yes. >> That's what really was a wow moment for me when I I was trading these type of strategies for some time and I was
[10:47] getting good results. I had not back tested them as much. So, once I started back testing it, it I gained more confidence that okay, this this uh live market. >> Sorry to interrupt, but I want you to
[11:01] meet Wendy, my new trading buddy. Her job is simple, keep me disciplined as an >> Stick to your plan, John. >> Wendy is an AI trading coach.
[11:14] I can drop in a chart and she analyzes it, points out key levels, structure, and what I should pay attention to. She's also a great sparring partner when I'm testing new ideas. But, the most important part,
[11:30] she keeps me accountable. >> Wait for confirmation, John. No setup, no trade. Exactly. If you want to check it out, you get 25% off the annual plan or the first 3
[11:43] off the annual plan or the first 3 months with the code setup profits. Link is below. All right. Back to the interview. Now, All right. Back to the interview. Now, let's get into the entry mechanics. But
[11:55] first, your underlying you told us that you are trading SPX. Why is that? instruments. ETFs, futures,
[12:07] ETFs, futures, stocks, but SPX should out to me primarily because it's cash settled. It has tax advantages and it is 1 to 10X of spy and is mathematically easier to model.
[12:21] And then there's a short smaller version XSP available as well. So that's where I design my structures right now on SPX and later on I plan to design on some other instruments as well, but SPX has been something that I
[12:36] structures. >> And you enter this almost every day. What at the at what time do you enter them and what are your conditions for entering the trade? >> The conditions on this strategy are
[12:51] fairly minimal. I that is I believe is one of the strongest parts of the that it can be based on the back test result. It can be open early in the morning from anywhere from 8:40 to 8:50 to 9:00 a.m.
[13:06] Depends on the some of the market conditions and and the volatility needs to be low. So the market has not gone down too much is was the other condition I put in to
[13:18] back test these strategies or this strategy specifically. The other solid strategy specifically. The other solid or good part about the strategy is that it all the back test results are with holding till expiration.
[13:33] are with holding till expiration. Which makes it a lot more easier from a regular trading and compounding standpoint that this strategy lets you adjustments, without any stops, or without any not having to worry about
[13:48] the overall big market movements. Obviously, this is 2 years data, so which is showing promising results. As market evolves, the strategy might evolve or be refined, but that's where how the
[14:02] strategy stands right now. >> But in the back test, your entry time is Eastern Time a.m. >> Yes, sorry. I mentioned Central before, so just to correct that. Yeah, I in the Eastern Time it's
[14:16] around 9:45 Central Eastern Time. Eastern Time. >> And you have one condition that the drop overnight in the market should not be more than a specific distances, isn't
[14:29] >> Yes, there's only one condition, right? And it works without that condition well points where it should not drop below that.
[14:41] >> And the same on the upside? >> Uh no condition on the upside. >> Why this condition for how much it can drop? >> Uh it it just basically is more the volatility side of things. There could
[14:55] be a significant movement is how I read it, right? If the market has dropped down quite a bit in to put very early in the morning till the morning market settles. When it has
[15:08] not dropped down much, the key point I see is the market is already more in a settled mode where it will go up or down to a certain level. If market has dropped too much when it opens in the
[15:21] morning based on our experiences, market can move quite a bit in either direction. So, this trade potentially could be put later in the day, but I and then I have not back tested that
[15:33] scenario when the yet. >> But do you open this automatic with automated trading every day? Or do you do it manually? do it manually? >> Yeah, I have done it primarily manually
[15:45] and I'm trying to start automating this strategy recently and that would be my goal for a strategy that is productized and engineered and I can feel confident for a longer term standpoint.
[15:58] So, but I sometimes do do adjustments or might want to trim if I have large capital deployed to a certain extent. That way I can let
[16:10] let's say I have X amount of capital deployed. I might take 75% of the capital and trim the position for the 75% of the position and then let the 25% expire till end of day. As the because the payoff improves as we
[16:27] move throughout the day, I could see a return on my capital at risk from return on my capital at risk from anywhere ranging from 5 to 20% intraday 2 hours before the market close and and at that time I might decide depending on
[16:41] the market conditions if I want to exit part of trade or hold trade or hold to expiration. The back test results are primarily for holding till expiration. >> Okay. Four butterflies and they are
[16:55] overlapping. So, this sounds very complicated. So, let's go through Let's go through them butterfly by butterfly and bring back option butterfly and bring back option structure of this example trade that we
[17:09] What is your starting point, Saurabh? >> Before I get into a little bit of the butterfly structures here, John, so the though this putting together this looks might look uh
[17:21] complicated, but once you define the template, either it can be done through a software like on a trading platform or through automation. So, you as a trader you don't have to think too much about setting this up every day. Right? Uh so,
[17:37] how I start these butterflies in this case, uh if you look at um case, uh if you look at um so, 75 80 is the starting point of this >> That's the at the money in this at the money in this example.
[17:50] >> Exactly. So, the that's I'm using it at the money and from there I open the first butterfly uh on the right side uh of the screen, which is the call uh 75 80,
[18:03] 75 80, 76 of five, sell two of those, and then 76 30. So, that's the first butterfly over here.
[18:15] >> So, the lowest long is at the money and then the shorts are how much further up? >> Uh 25 point wide. >> And then further 25 up to the to the top long.
[18:29] >> Exactly. >> All right, that was the uh call >> All right, that was the uh call butterfly to the right. >> Then we go to the next butterfly as we move to the right, this is 70
[18:42] which has a 10 overlap with the previous butterfly, and then you have 76 40 as the center point of these butterflies, and then 76 55 instead of 76 60 to and then 76 55 instead of 76 60 to create that floor of five points.
[18:57] >> And what this is floor of five points doing? >> So, the floor of five points is reducing the risk uh of overall structure. If the market goes beyond 76 55, that preserves some of the capital
[19:13] deployed uh or the capital at risk. So you can see here that the overall debit is 1255 for this trade. By putting the floor, the max loss is reduced to 755 instead of 1255. >> So those are the two butterflies to the
[19:28] right and they are both call butterflies. And then we move to the left side of at the money and the closest butterfly bear here. It is a
[19:40] call butterfly. I guess it can also be a put put butterfly. butterfly or a call because these are balanced structures. balanced structures. So the only it matters to have a
[19:53] put and the call on the left and right most when you do a broken wing butterfly risk profile. >> So what are the strikes on this nearest butterfly to the left? >> So this is 75 85
[20:09] is the strike. It's overlapping the 75 81 that we started by five points. 81 that we started by five points. Then we have 75 60 as the midpoint. It's Then we have 75 60 as the midpoint. It's 25 wide and then we have the 75 35
[20:22] which is again 25 point wide. So it's again a 25 point butterfly with a five point overlap with the with the butterfly on the right of it. And then from there we open another butterfly 25 point wide that has a 10
[20:36] point overlap 70 5 45 and then we go down to 75 20 for And then we close it at 7500. This also has a five
[20:48] point floor. So that's what you see on the left and right that all of them have risk profile if the trade goes out of the range totally. the range totally. >> And the lowest was a put butterfly.
[21:01] >> How do you open this? If you're going to open a manually, I assume you cannot open uh all of these in one operation.
[21:14] you don't know what the spot of the market is going to be at that time. So, it you could be rushed to open it at the the spot that you're trying to open like in this case 75 80. So, I use my uh option engineering
[21:28] software that I have developed to open them at a same time. them at a same time. And or I could automate them. Uh so, so them. So, I can either templateize this and set up an an automation or I can
[21:42] open it through my software, which allows me to do some adjustments to lift profile if I feel the trade might not work out. >> And if you were to open them manually in
[21:55] >> And if you were to open them manually in thinkorswim or tasty or other platforms, um how would you kind of do it? One butterfly at the time? >> Yes. One butterfly at a time uh and making sure uh all the strikes are
[22:10] aligning well, the right overlap is there, and uh all of them come together well. You can look at thinkorswim from the risk profile standpoint. thinkorswim doesn't give you the visual that is similar to Option Strat, but you can
[22:23] still get the risk profile idea from thinkorswim after opening. The one thing I caution people is uh it is important to use some level of a software here uh or automation, which helps because you don't want to make a
[22:35] helps because you don't want to make a mistake and the risk profile changes. structure. Uh give it a name Skyline because it has a Skyline kind of a look and and it's important to just use a rules with tool
[22:49] important to just use a rules with tool set that can open it uh consistently. loss that you have on this uh on this uh structure of uh four butterflies in this
[23:02] >> Yeah. If you look at this particular example, uh the max loss, which I also call capital at risk, is 755.
[23:16] the peaks of the butterfly, is 1245, and the net debit is 1255. the one of the key outputs of this structure, is almost like uh 1% from the spot on both sides, which accounts to
[23:32] approximately 1.8 to 2%. >> And that range is the same every day. >> Yeah, that's with the automation, right? So, I can change slight characteristics of this
[23:46] trade uh based on the market conditions. If I see that market is going to be more stable, I if I'm not doing an automated trade, which was used in backtesting, I might reduce the number of butterflies on the
[23:59] left and right, uh to reduce the overall cost of the trade, to reduce the overall cost of the trade, and improve the profit profile. Uh so, it's I can adjust it if I'm managing it through my software, uh and and uh
[24:14] accordingly sequence the opening of it, which can help me reduce the cost, or or or I can open it one at a time, uh and based on the technical indicators, and ensure that uh I get the good fill on
[24:27] that direction, then I can add the other butterflies accordingly. So, I start the trade from a uh from a uh positive standpoint. So, this whole structure can be built to the point sequentially, or it can be automated uh altogether. So,
[24:43] if you build sequentially, you can gain some execution edge. >> If you know the direction, which some of us don't. technical indicators which they rely heavily on. For them,
[24:56] uh they can use that for somebody who just wants to keep it simple, which is I would like to do that, too. To just let let it do its thing and let it let's do a automation or just enter trades together and let them fill all at
[25:10] the same time. >> Now, let's move to the exit mechanics. As we see at expiration, you have some very attractive profit tops, but you also have some some
[25:24] well, previous gets called valleys of death, where the being where you have the max losses. So, what is your rule for taking profit and when trade? >> In the back test, the the results show
[25:41] that if you don't touch it, the profit profile is same as it works out very well, right? As we saw in the back test, you can get returns of in the back test, you can get returns of 200% to 800% in couple of years,
[25:54] if I want to exit out of the trade, there are few exit out of the trade, there are few conditions I look at. If the trade is at the middle valley towards the end of the day, like couple of hours and the trade
[26:07] is profitable, I can close the the whole trade and get out of it at that time. Or I could put a adjustment that time. Or I could put a adjustment or a hedge to uplift the valley and that
[26:21] would ensure that I can't have the full loss as the valley. expire. >> Yes, that's what the back testing tells. some of the position and let some of the position run till expiration. As I move
[26:38] run let everything run towards expiration. >> What about the stop loss? Do you set up any kind of stop loss? Is there any point where it's going into minus where you just decide I will
[26:52] have to close it. I don't set up any stop loss in the strategy. The strategy works without a stop loss. from a bad standpoint with like manageable capital at risk, then
[27:08] this will all start compounding for the back test. Uh so, you have to take certain risk. No No trade is risk-free, but with stop loss, which shouldn't trigger in this trade much because the range is so large. Uh
[27:21] Uh but and many times, as we have seen in comes back. So, if you take a stop loss, could have been your one of the best days from a
[27:34] overall exit standpoint. So, that's where I don't take the stop loss. I might do some adjustments or extend the range by adding uh a condor range. >> Let Let's get into that because
[27:49] as I understand it, this is a strategy designed to be automated. Open at 9:45, let expire. So, it's a bit complicated to open it, but you can set templates for that and uh the back test is is just let it expire.
[28:04] But, uh you also tell us that you do some manual management uh sometimes. So, let's get into your management techniques. Uh yeah, in what situations will you try to manage it and what are the
[28:18] alternative ways of doing it? >> So, John, uh I have set up this trade in my software. I have Let's assume that I have uh executed this trade and it's it's it's live at this point. So, the capital at risk is
[28:32] 790 and the market is somewhere trending around the midpoint of the overall So, the adjustment in this case that I would do is I will open up a call condor
[28:45] as one adjustment and use that to lift the center valley. So, I can move this to the condor to the center valley and then now the center valley has lifted up and you can see that it is lot less drawdown
[29:01] Right? So, the center valley has lifted and there's lot less drawdown by adding There is a cost to adding it. So, which makes it can reduce the profit profile, but but this
[29:14] can help reduce the drawdowns. Then I now? >> Uh so, the it's a call condor similar concept as iron condor. The what I it is like a it's a five-point
[29:28] like a it's a five-point condor. 7570757575807585 >> Yeah. And that is the beauty of this trade because I know as I enter this
[29:41] trade if I want to manage risk, I already have a adjustment ready for me to do based on where the market is. >> Or the other ways you will adjust I guess the other risky position is if the market moves beyond your
[29:55] butterflies. >> Yes. If the market moves beyond the butterfly, in that case I can add a another butterfly. Right? Let's say let's take an example here and I'm just
[30:09] going to use a put butterfly and maybe I'll make it slightly wider so we can look at it from a profile standpoint. Uh So, I made it a 20-point butterfly. And now I'm going to try to
[30:24] move it to the if the market is dropping and I want to get more bandwidth, then I or more range, I can add another butterfly and this would automatically
[30:36] give me an additional range to handle the the drop down and not by not investing too much capital because generally speaking put butterflies are less expensive than call butterflies in my experience.
[30:51] that's below the market because of the volatility in the price of the puts. >> Now at what time would you add this extra butterfly when it what stage would
[31:03] >> If the trade is in a normal day is performing well but the the the market is moving towards the like the bigger valley I would try to start thinking about adding a butterfly around
[31:16] 2:00 or on a iron condor around 2:00 to fill the the deep valley in the center. And just to make sure that I don't run into a major drawdown.
[31:28] For market movements if I start seeing the suddenly the volatility has increased because of the headlines came out and it's drifting towards the downside or upside at that point I might just proactively add one on the side it
[31:43] just proactively add one on the side it might drift more to reduce capital at risk. >> Each of these adjustments increased risk total risk in the trade, right? And also reduced
[31:55] max profit. >> Exactly. Yeah, there as you add >> Exactly. Yeah, there as you add adjustments that impacts your P&L and that's why adding adjustments you have to just be careful about but the also
[32:07] major drawdown. Like as we say in the trading keep your losses small and then you can continue trading the next day. So that's balanced. >> Do you ever just close it for a loss
[32:23] and not try to manage and like close it early for a loss? early for a loss? >> Rarely I would say not not very often. Rarely I might close it if I see the adjustment cost is getting too much and
[32:36] I have some profit in the trade. I might just rather than managing the trade, I might just close it. But with the backtesting automation, results show like it just keep it running. Keep the capital manageable, your
[32:50] deployed capital at risk small, and let the it compound. So, so there's pros and cons of managing it is how I see it. >> A tricky decision how to do it.
[33:03] Let's talk about the risks in this trade, and let's bring back option strats for so it's easier to kind of follow along. But what what's the worst follow along. But what what's the worst that can happen with this this trade?
[33:16] >> The worst that can happen with this trade is the max loss or the capital at risk. You're losing that if the trade ends up in the middle valley, or it goes outside of the range.
[33:28] is that happening to you? >> Based on the analysis I did, I don't have my the numbers handy. The the middle valley is where there is more loss I see happening, and then the outer ranges,
[33:43] there the loss is less. That's where you could optimize the outer ranges or outer butterflies as the market based on the market conditions. But generally speaking, though if you look at the backtest results, it showed
[33:58] 53% win rate overall. Going in the valley is probably in in the 47% range, not the deepest part of the valley always. Like the deepest part of valley
[34:11] is only a part of the overall profile. And if you look at like just take a step here that you're looking at. If you see just visually, profile. So, by probability and mathematically,
[34:28] the probability of being green is quite a bit higher and having a higher higher. So, which is where I see the back test should demonstrates that result that if you continue doing this trade
[34:44] on a daily basis, your profit profile is is a lot better. >> I guess that the hardest situation to get out of here is if we have a sudden big move in the market in a day like 2 3% fall or 30% going up.
[35:00] That that could be a situation that would be hard to get out of the max >> Yeah, that will be a hard situation. As I demonstrated earlier, we could add multiple butterflies and overlay another similar trade to manage that. Because
[35:15] doesn't go very frequently in those ranges and it many times comes back. So, it's up to the trader to decide if you want to close the trade or if you want to extend the range and that way
[35:30] you can reduce some capital at risk. But you'll be deploying more capital so it's kind of both sides of the equation. >> I always ask my guests to put their strategy on a risk profile scale where
[35:43] strategy on a risk profile scale where one is very low risk and 10 is very high you see fit. Where would you put your >> The skyline strategy if I compare to industry standard strategies like iron
[35:58] industry standard strategies like iron condor or butterfly single butterfly, I on a if you're doing this trade on a continuous basis to be lower risk than those those strategies. Speaking generally speaking, I would say this is
[36:13] in the scale of five if it's well managed and automated then that's where I would put it because then you're not having to enter these trades Which can add some level of risk. >> Let's talk about the results. We have
[36:27] seen the back test results that showed a very nice curve going upwards. But you also have been trading this for a while personally. What have been your personal strategy?
[36:41] been fairly good. I have traded this and some variations of this, right? But but in the similar type of a ballpark of multiple butterflies or condor. So
[36:53] around $5,000 capital deployed in a on a daily basis, I've seen results from the beginning of the year around 1,000% return. So So that's the kind of results
[37:06] I've seen in the overall profits ranging from 60 to 70,000 dollars on these strategies. >> 1,000% return. How do you calculate >> Uh it's basically I'm calculating based on the capital at risk deployed every
[37:23] >> Okay. >> So that's the methodology I have used. Now I've not used the methodology of my portfolio or anything of that nature. So So this is treating this as an independent strategy by risking 5K every
[37:37] day, what is the return and that's the kind of return I have seen. >> So to be specific, your 5,000 5,000 allocated capital on this strategy has then grown to how much in a year?
[37:54] >> Uh somewhere around 65, 70,000. >> And has that been consistent over >> No, I'm just talking about year-to-date, right? So So the
[38:09] there was a period where I was even up more and then when the market rallied quite a bit, there were some challenges in the strategies I used to do. So I started refining that strategy and this strategy
[38:23] that I came up recently was able to withstand the quick rallies up in the market as well. So I had did have some draw downs and then I kind of again started having some good profits as the market has settled
[38:36] But I this strategy I have back tested to perform in different types of market conditions. >> How will you sum up this what we've been through in a few words and especially what would be your one two or three most
[38:50] important takeaways that you really want your the audience to remember? >> So as we look at this strategy, so what I want the audience to remember is when you enter into a trade it's important to not just think about
[39:04] the name strategies. It's important to think about what risk profile you're looking at, what payoff profile you're looking at and what kind of uh psychological emotional setup you want in that trade.
[39:18] That is what becomes very critical for me to design strategies such as Skyline. Because that's what I use as what is the outcome of a trade I'm looking at. And how can I engineer it to handle the risk and
[39:34] uh will be okay for me. >> I guess you're not trading only this strategy. How does this fit with other strategies that you do? >> Yeah, this is one of the strategies I
[39:47] trade often. I have some other strategies which are slightly long dated ones with the engineering framework that I've been working on which are more targeted towards 10 to 20% return in a week's time frame
[40:02] and which I exit uh uh within a week's approximately within a week's time and it might be a 14 DTE or a 21 DTE strategy. And then I do do some calendar spreads and things of those
[40:15] it in. >> What would be good resources to learn more about this style of trading? >> Good resources to learn, I have been reading some books and lot of online content. So, one of the books I read as
[40:30] was options as strategic investment. So, that's one book, but generally, there a lot of good online resources. Your channel is a good online resource and this option omega option strat type of tools lets you kind of
[40:43] visualize understand the back test and automate. So, those strategy tools also help you define these type of strategies well. And but there are many to. >> And we do have a number of interviews on
[40:58] this channel about different strategies and ways of trading including several interviews about other ways of trading zero DTE butterflies that you might want
[41:10] to take a look at. Suraj, thank you very much for coming here and sharing your strategy. >> Thank you, John. My pleasure. It was discussion and looking forward to any questions that
[41:25] the audience has for me. Thank you. >> And as always, you can ask the questions in the YouTube comments and Suraj will answer. Right? >> Yes, John.