---
title: 'Inside a 0DTE Options Strategy Targeting 50–100% in 24 Hours'
source: 'https://youtube.com/watch?v=l5LqokEA0A4'
video_id: 'l5LqokEA0A4'
date: 2026-09-13
duration_sec: 2470
channel: 'Theta Profits'
---

# Inside a 0DTE Options Strategy Targeting 50–100% in 24 Hours

> Source: [Inside a 0DTE Options Strategy Targeting 50–100% in 24 Hours](https://youtube.com/watch?v=l5LqokEA0A4)

## Summary

This video features an interview with Jeff Tompkins, a hedge fund manager and founder of Altos Trading, who explains his 'Golden One Day Options Trade' strategy. The strategy is a market-neutral, non-directional long strangle using zero DTE (0DTE) or one-day options, designed to profit from expected moves regardless of market direction. Jeff details entry conditions, strike selection, profit targets, risk management, and adjustments, emphasizing defined risk and the elimination of directional forecasting.

### Key Points

- **Strategy Overview** [00:37] — The Golden One Day Options Trade is a market-neutral, non-directional strategy that profits from short-duration option premium (0DTE) regardless of market direction, ideal for volatile markets.
- **Trader Background** [01:48] — Jeff started trading in the late 90s, transitioned from equities to options, and now manages a hedge fund (Altos Capital) and runs an education company (Altos Trading) to level the playing field between retail and institutional traders.
- **Goal: Eliminate Directional Forecasting** [03:23] — The strategy removes the challenge of predicting market direction, allowing profit potential whether the market rises, falls, or experiences a black swan event.
- **Why Long Options (Gamma Advantage)** [04:18] — As a buyer, gamma works in your favor: small moves in the underlying can lead to large moves in option premium. Sellers face gamma risk, but buyers harness it.
- **Trade Structure: Long Strangle** [05:55] — The trade involves buying an out-of-the-money call and put on the same underlying and expiration, structured around the expected move (implied move).
- **Expected Move Concept** [06:25] — The expected move is the market's forecast of how much the underlying will move by a future date. The trade buys a call at the upper edge and a put at the lower edge of this move.
- **Live Example** [07:07] — Jeff put on a one-contract SPY trade for $83, which was up $60 (72%) in 45 minutes, illustrating the strategy's profit potential.
- **Cost and Max Loss** [08:02] — Typical cost is about $1 per contract ($100) on SPY, with a cutoff of $1.15 on SPY and $1.30-$1.40 on QQQ. The premium paid is the maximum loss.
- **Entry Conditions** [11:51] — Avoid entering during earnings (vol crush). Prefer low or increasing implied volatility (IV percentile below 35%). Look for range expansion on candlestick charts.
- **Timing and Expiration** [13:08] — Trade is designed for 0DTE (enter near cash open) or 1DTE (enter near cash close the day prior). Do not go further out than one day to maintain gamma edge.
- **Strike Selection** [15:46] — Find the expected move (e.g., ±2.67 on SPY) in the broker platform, add/subtract from current price to set strikes (e.g., buy 768 call and 762 put). Avoid excessive skew; aim for roughly equal premium on both sides.
- **Profit Targets** [20:42] — Target 50-100% ROI. If IV is low and rising, aim for 100%; if IV is elevated and flat, target 50%. Use two separate limit orders to exit each side independently.
- **Loss Management** [24:56] — If the trade goes against you, convert to an iron butterfly (sell ATM straddle) or iron condor (sell OTM strikes) to mitigate loss or even turn profitable. Alternatively, accept the loss if adjustments aren't viable.
- **Risk Profile** [29:13] — Worst case is losing the premium paid. Risk is defined and low (2-3 on a scale of 10) compared to naked options. Position sizing is key; size for zero.
- **Track Record** [33:34] — Over the last 25 trades, 20 were winners (80% win rate). Long-term average is 75-80% win rate, with winners and losers typically in the 50-100% range.
- **Key Takeaways** [35:56] — The strategy removes directional forecasting, is defined risk, and allows rapid compounding due to short duration. It complements option selling and directional strategies.

### Conclusion

The Golden One Day Options Trade is a defined-risk, market-neutral strategy that leverages gamma to profit from expected moves, with a strong track record. It is best used in volatile markets and requires disciplined entry, management, and adjustment rules to succeed.

## Transcript

I tell people a 50 to 100% ROI on this trade is relatively conservative. There's the potential to make money in both directions. We have interviewed many zero DTE traders on this channel.
Almost all have been options sellers. Today, we take the opposite side. The strategy is called the Golden One Day Options Trade.
Welcome to Jeff Tompkins. Hello, John. Great to be here. Yes, let's get straight to it. Give us the 40-second version of your golden one-day options trade.
How would that work for you? Sure, John. Well, the golden one-day options trade is a unique strategy, so it's market neutral or non-directional. So essentially, as you mentioned, it takes advantage of short-duration option premium or zero DTE options,
and it has the potential to profit regardless of which way the market goes. So it's the perfect strategy for volatile markets. And, of course, we're going to walk through all the steps and how to build the trade.
But it's a very simple trade to put on. It's a simple trade to manage. And it's defined risk. So you always know what your risk is up front before you get into the trade. And you know exactly what your profit target is as the trade progresses.
So that's kind of the high-level overview of the Golden One Day Options trade. Very exciting. And those who are following the channel know that I am a seller primarily in my zero DTE trading. So I'm really curious to learn about a long strategy.
But first, before we dig into all the details, tell us a little bit about yourself, especially as an options trader. Sure. Well, and I should say that I do a lot of options selling as well. In fact, most of my options trading is on the sell side.
But I'll get into why you should. I think it's wise to incorporate some option buying, especially with short duration. But anyway, we'll get to that. So, yeah, I started trading back in the late 90s.
So I started on the retail side, like most of your audience out there, I'm sure, and started trading equities and then gradually transitioned into options. And like most people, just started buying calls and puts and realized that's a very difficult endeavor,
difficult to make money just buying single leg calls and puts and gradually transitioned into spreads and then more options selling but interestingly back when I started you know trading options we only had monthly expiration cycles
right we had the third Friday of every month we had the option expiring and then weeklies came along and now of course we have zero DTE contracts which is really exciting but but I now trade on the institutional side as well so I'm
I'm a hedge fund manager. I manage money for my clients at Altos Capital. So I continue to trade my own account on the retail side, but I also trade on the institutional side. So a little over 10 years ago, I launched a company called Altos Trading, and we're a trading education company.
And our goal is to really kind of revel the playing field between institutional and retail traders and kind of get a lot of that education and knowledge out there that I've accumulated on the institutional side out to the retail trading.
crowd. Where are you located? We're headquartered in Boise, Idaho. Jeff, what are you trying to achieve with your golden one-day options trade strategy? A big thing we're trying to achieve
is to eliminate the difficulty of directional forecasting. So most people trade directional option strategy, right? They're trying to predict which way the market's going to go.
And with the golden one-day option trade, the idea is that we remove that challenge. It's, again, a market-neutral, non-directional strategy. So regardless of whether the market skyrockets or it sells off,
maybe there's a black swan event or a market crash that we don't foresee, there's the potential to make money in both directions. So we're essentially eliminating the need to forecast directional movement in the market.
You touched on it a little bit, but let's repeat that. Why go long instead of going short? That's what many traders prefer to do. Great question. And we'll get into that in more detail. But the idea and the reason that we use short-duration option contracts with the golden one-day options trade relates to one of the option Greeks.
So it's related to gamma, right? You have delta, gamma, theta, vega. And as an option, a lot of people don't realize this, but as an option seller, it's, you know, short-duration premiums.
We're doing a zero DTE short options trade. You're exposed to a fairly high degree of gamma risk, right? So, in other words, a relatively small move in the underlying stock or whatever you're trading can correlate to a large move in the option premium.
Using, for instance, defined risk option selling strategies on zero DTE contracts is important. Now, as an option buyer, you can actually harness the advantage of gamma, right, in your favor.
and that's the idea behind how Golden won the options trade is that and why we use zero DTE or short duration option contracts because as an option buyer, if you have a small move in the underlying,
it can correlate to a large move in the option premium. So I guess we can say that when you are a seller, Theta is your friend and Gamma is your enemy and when you're long, Gamma is your friend
and Theta is your enemy. That's perfectly put, yeah. So, let's show one example maybe of what you do in this trade.
I'll bring in one I just put on this morning just as an example for how I understand that you do the strategy. Can you just explain very briefly now what is the trade in itself?
Sure. So, the Golden Monday Options trade is what we call a long strangle. So it involves buying an out-of-the-money call and an out-of-the-money put on the same underline, right,
and the same expiration cycle or expiry. So, again, very, very simple. And what we do is we use what's called the expected move or the implied move. And the idea is that a large percentage of the time, expected moves are reached.
And so we structure the trade or build it based on the expected move or around the expected move. And so we're essentially buying a call at the upper edge of the expected move and a put at the lower edge of the expected move.
And the idea is that the market reaches or exceeds that expected move and you profit on one side of the trade, whether that's the call or the put side. Right, and if we kind of drag this as the day goes on,
you know, we will see how this develops. So it profits if you have a big move. And actually, you know, I put on just one contract live this morning on SPY,
I paid $83 for this trade, and it's up $60, so 72%. There you go. In 45 minutes, yeah. Excellent, nice job. Good example, I guess.
Yeah, and we haven't gotten to that part is the profit target, right? And that's like any strategy, you always want to know your risk before you get into the trade and you want to know where you're going to take your profits.
So you're not making that decision after you're already in the trade. That's where people tend to make emotional trading decisions, right? You want to have that all predetermined. And with the Golden Monday option trade, it is. We know, again, it's defined risk.
So you always know what your risk is up front. And that's limited to the premium that you pay for the trade, as John just mentioned and showed you there. It's obviously can be – it's a small account-friendly trade.
So John showed you one on the SPY, and I often do this trade on either the SPY or the QQQ. And on the SPY, on average, I would say, you know, it's going to depend on other variables like implied volatility.
But on average, you can expect to pay about $1 for the trade or $100 a contract. It's a pretty typical price. It looks like John maybe got in for a little bit less than that, right? I got in for $83.
$83, yeah. Then that is my max loss, right? Sure, that's your max loss, yeah. And that's actually a great price for this trade. Obviously, the lower the price, the better.
And I do have kind of a framework or guide for how much to pay for this trade on the SPY and the QQQ. Because if it gets too expensive, that's one of your indicators that you want to not get into the trade.
So my cutoff generally is about $1.15 on the SPY and roughly $1.30, $1.40 on the QQQ. And we will get into that. Just one, let's just explain one basic term first.
You mentioned estimated move. What do you mean by estimated move? Yeah, so essentially what the options market does is it forecasts or price in how much the underlying,
whether that's the S&P 500, the NASDAQ, or an individual stock, is expected to move by a future date and time. So we call that the implied move or the expected move. a lot of traders aren't aware of it or if they are they're not maybe sure how to use it but it's
hugely valuable information and we can use it all sorts of ways we can use it to define risks realistic profit targets or build trades like the golden one the option trade but essentially it's the option market forecasting or handicapping how much the underlying asset is expected to move by
a future date and time sorry for interrupting the interview but i would like to spend 40 seconds to recommend a fantastic tool for options traders. It is OptionsStrat. You may have
noticed that we use OptionsStrat often here on SetupProfits and to be honest it would be hard for me to do my options trade without options trade I love how I can visualize my trades in options
trade, see how they will develop over time, and even share my trades with others. There are numerous other functions, such as the options flow, telling where the big money in options
trading is flowing right now. This is a recommended tool. Check out the affiliate link in the description. Okay, we have covered the basics. I think it's time to dig a bit more into the details, because
this is not, of course, as simple as just buy one long on each side and be done with it. So let's start with the entry mechanics. First, what are your preferred underlines for this trade? Yeah, so the preferred underlines are, I like to do this trade on the S&Ps and the NASDAQ.
Essentially, you could do this trade on any optionable security, assuming that there are liquid options. But the majority of the time, I like to use the index products, like the SPY, the QQQ. And occasionally, I do this trade on the options on futures.
So I'll occasionally do this trade on the options on the ES, for instance, the E-mini S&P futures. The advantage you have there is the options on futures trade around the clock, like the underlying futures contract.
So you have a little bit more flexibility there to manage the trade, get in and out, you know, outside of U.S. equity market hours. So take us through your process of deciding to do the trade.
What are the conditions for entering this trade? Because as I understand it, this is not a trade you're entering every day. So what are the specific conditions for when you will enter it? That's correct, John.
So like anything else, you don't want to just go out and blindly put this trade on. Some of the primary conditions we're looking at, and long strangles benefit from an increase in volatility, right?
So at the very least, you don't want to get caught in what we call a ball crush. So, for instance, you wouldn't want to put this trade on an individual stock where the company is expected to report earnings that day, right?
So long-string goals, again, benefit from an increase in implied volatility. So I like to put this trade on when implied volatility is already low or it's increasing and expected to continue to increase.
So that's kind of one of the major timing components I use for the gold one-day options trade. How do you define implied volatility being low in this context? Good question. I generally use ID percentiles.
So I'll look at the ID percentile. And, you know, generally below an ID percentile below 35%, I would consider to be, you know, fairly low.
And what time of the day would you put the don'ts? Another great question. So this trade, and I call it the golden one, the options trade, because it's designed to be in and out of the trade within about a 24-hour period.
And some of these were in for a matter of minutes, others maybe the entire day. But here's the key. This trade can be done with, as we mentioned, with zero DTE contracts.
In other words, you're in and out of the trade the exact same trading session. And if that's the case, you want to get into the trade near the cash open, right, so near when the market opens so you have as much exposure to that day's movement.
But the trade can also be done one DTE. In other words, I'll put the trade on near the cash close the day prior to expiration. And then we'll, you know, set the trade up for the next day's expiration cycle.
It can be done either way. We just don't want to go further out than one day. And the reason for that is you start to rapidly lose that gamma edge as you go further out in expiration. So, for instance, I would never do this trade, you know, a week out in expiration or a month out in expiration.
It's really designed for short duration. And so it could be zero DTE or one day to expiration, one DTE. Are there other conditions for when you will enter the trade that once you have been through? So, interestingly, this trade can be done without even looking at a price chart, a candlestick chart.
But I do incorporate a little bit of candlestick analysis into this trade. And the other thing I'm looking for, and this will often correlate to volatility, the other thing that I'm looking for is what I call range expansion.
So if you look at a basic candlestick chart, right, and generally when you're in low volatility conditions, you're going to see narrow high-low ranges. So the high and low of the candles will generally be pretty narrow, right? You'll see the small wicked candles.
Range expansion is simply when the high-low range of the candle widens, and that, again, will generally correlate with volatility expansion or an increase in volatility. So I'll often put this trade on when I notice there's range contraction on the chart,
in other words, narrow high-low ranges, but it's starting to widen day-to-day, and that can be a good timing component for this trade as well. Okay, let's move to selecting the strike.
We have mentioned that you do this around estimated move. Can you show us how you find the estimated move and exactly where you would place the trade?
Absolutely, yeah. The first thing that I'm going to do when I'm building this trade, and we can just do hypothetically, say we're doing it for today's expiration. John already has one on on the SPY. But I would go to the current day's expiration.
And in Tinker Swim, the expected move is found over to the right of the expiration cycle. All right. So you just simply go over here to the right. Now, this will be located probably in a different spot in your respective broker platform.
But most optional brokers that offer options trading are going to provide the expected move. But I can show you a way to estimate it as well in just a second. But that's what this number over to the right is.
We can ignore the percentage. That's an annualized vol percentile. It's the number to the right that I'm concerned with. At the moment, that says plus or minus 2.67. It's probably a little hard to see on your screen, a little small.
But it says plus or minus 2.67. And you're on the spy now. And I'm on the spy, yeah. And so that's the expected move number.
And what it's telling us is that between now and the end of the trading session today, the SPY is expected to go up or down by roughly $2.67.
And so that's what this expected move number is. And that's what we use to build the trade. So what we do is we simply add and subtract the expected move from the current underlying share price, right?
So right now, SPY is trading around $7.65 a share, right? So we would simply add the expected move. And I always tell people, don't get too caught up in the pennies, right?
You can round up or down, right? I could round this up to roughly three. In fact, let's just do that. So what I would do is I would add 3 to 765, and that's going to give me 768.
Now, of course, we're not doing this right at the catch-up, and the market's already been open for about an hour, so this is just more for demonstration, hypothetical purposes. These wouldn't actually be the strikes, and John probably has different strikes in his strangle.
but then we would subtract 3, right? And that would tell us to buy a 762 put. So, this is my put, this is my call, sorry that's a little messy, but I can show you
here in the chain, right? So, we would go down here and we would buy the 762 put, right those are right now those are offered at 21 a contract and then we
would buy the 768 call which are currently offered by at about 38 now here's the other thing that you want to be careful of with this trade is what we
call skew right so generally there's going to be skew or difference in price on the put and call side of the chain and generally there's a premium on the puts, right? Puts cost a little bit more than calls at equidistant deltas. But the important
thing is you don't want there to be too much skew in the trade. You want to try to pay relatively equal premium on the call or the put side. Because again, with the golden one-day option trade, we don't care which direction the market goes. It could rally to the upside or crash to
the downside, and the trade has profit potential. But you always want to keep in mind, you have to make up the premium on one side of the trade. And when we talk more about exits, I'll give you a little trick that I use for exiting this trade as well that relates to that. But that's an important
consideration with this trade as well. But that's how the trade is built, is we're simply adding and subtracting the expected move from the underlying share price when we put the trade on. And then again, that's your maximum defined risk, whatever you pay for that trade is your defined risk.
you can't lose any more than that amount on the trade. So basically, if I understand it correctly, the estimated move is your starting point. Then you adjust from there so that you get approximately the same.
You pay approximately the same on both sites. Exactly. And it will never be exact, but it'll be close. If for some reason you can't find that expected move in your platform,
there's a way to estimate it. and that's simply to add up the at-the-money straddle, meaning that you just take the strike price closest to the underlying share price and add up the premium at the offer on the call on the per side and that will actually give you a pretty close estimate of the expected rate All right you have answered the phrase Let now talk about your SXX mechanic
When will you take profits? What are your rules for that? Yeah, the fun part, right? That's what we're all here for. So I typically target between a 50% and 100% ROI.
In other words, I'm looking to make about, at a minimum, half of what I invest in the trade up to double the amount that I invest in the trade. And that's possible because of these short duration contracts.
As I mentioned earlier, a relatively small move in the underlying can equate to a large move in the option premium. And that's, again, largely due to gamma. I tell people a 50 to 100% ROI on this trade is relatively conservative.
There are occasions where I've seen the zero DTE contracts go up three, four, five hundred, even quadruple percentages in a single day. So the key here is that in terms for the question probably is, well, which do you do?
Do you 50 percent or 100 percent or somewhere in between 75 percent? And I think that on the implied volatility when I get into the trade. So if implied volatility is very low when I put the trade on and it's increasing.
Right. And probably a lot of your viewers look at the VIX, right, or use the VIX to gauge volatility. Right. You're noticing the VIX is starting low on that day, but it's rising considerably.
Right. So we're getting volatility expansion. I would be more aggressive with my ROI target. Right. I'd be looking to make closer to that 100 percent return on my investment. If volatility is already mildly elevated and not really increasing much, I'll be more conservative on my ROI.
target. I'll typically target a 50% or half the investment in the trade return in that scenario. So let's bring my example trade in because I put this on actually just after the market
opened today and now we are about one hour and ten minutes into the market and my trade is up up 123%. Should I take the profit now?
The VIX has been going gradually down this day that we are recording this. Should I take it off or try to get more? Yeah, good question.
You've already hit the profit target. So again, 100% is generally our max profit target. There are occasions where I hit more or higher ROIs than that, and you obviously have.
in this example, John, but now would be a great time to take profits. You've already doubled your money or more than doubled your money and hit the profit target. With that said, there are ways to manage this trade to allow for larger gains.
For instance, you can trail a stop on – and I'm assuming you hit this on the call side since the S&Ps are up about half a percent right now. Yeah. So you could start trailing a stock on the calls if you want to go for a large any.
We have a relatively nominal rise in the market today, right? So we're up about half a percent right now. But your trade's up 136%. And so that's possible, but it doesn't always play out that way, right?
So you want to be cognizant of volatility. if the VIX is starting to come back down, as you mentioned, that would be a good indicator to take profits because the trade is vulnerable to theta
as you get closer to expiration, theta decay, and volatility crush. So those are kind of the two things you want to be aware of. And so, yes, now would be a great time to take profits. Well, profit taking as you made the baby hurt.
Yes, yes, exactly, yes. But that's when things go well, you know, like today, but of course, the market is the market, and it doesn't always go like that.
So what are your rules on the other side when things are not moving, when it goes against you? What are your rules for taking a loss and you operate with a stop loss, etc.?
Great question. Yeah, of course, like any other strategy, trade management is critical, And there will be occasions when the market doesn't move, or maybe you get caught in ball crush.
There are different scenarios where the trade may not work out. And there are ways to adjust this trade. So typically what I'll do, and this is where premium selling comes into the picture,
is I'll actually sell premium to mitigate a loss, or even I've had scenarios where I've taken a losing golden Monday options trade and transformed it into a net profitable outcome by selling premium.
So essentially there are two main adjustments I use with this strategy. And that is to convert it either into an iron butterfly or an iron condor. So I don't touch the original trade.
I leave it in place because you never know what is going to happen, right? You could still end up getting a big directional move by the end of the day. To convert it to an iron butterfly, we simply sell and ask the money straddle, right?
So we leave the original trade in place and we sell premium on the call and the put side at the same strike price that's currently, when you make the adjustment, closest to the underlying share price.
The other option is to convert it to an iron condor. That one's only possible if there's enough premium left in the contracts that are trading near your original golden one-day option trade strike prices.
And if that's possible, I'll usually go with that option. And so the determining factor is just simply how much premium can you bring in by selling calls and puts to either mitigate a loss or, and again, in some cases we can transform these into net profitable trades.
But you would simply sell an out-of-the-money call and put one strike away from where your golden one-day options trade is structured. So how much premium are you requiring to do that?
Good question. Ideally, I want it to be around what I paid for the trade, and most of the time that's going to be possible by converting it to an iron butterfly, selling an asset money straddle, or the premium exceeding what I paid for the original Golden Monday options trade.
And that way, if vol continues to contract or the market just doesn't move, you get the faded decay on the short options. And gradually, as you get closer to expiration, that premium can make up for the loss and
even exceed the loss in the original golden money options trade. But will you sometimes just let this expire and just take the loss? Because the max loss is your debit.
Sure. Yeah, there are circumstances where I just accept a loss as well. And what I do, I do what I call sizing for zero. So I size all my positions for zero, meaning that I determine my risk up front,
and then I back into the number of contracts I'm going to trade based on that risk. So I don't use a stop loss in this trade. There's no stop loss needed. Your risk is already defined by nature of just buying a call and a put option.
and so I size the trade based on if that trade went to zero. And there are occasions where I just let it go, and that might be because there's just not enough premium in the straddle
or converting to an iron condor that would warrant adjusting the trade. And so you want to look at that. And then also market conditions. Maybe it's an erratic day and prices just jumping all over the place, or maybe it's headline-driven.
Maybe there's a news event that might do something unexpected to the market, and I just don't want to add any short premium to the position.
So there are a number of considerations there. We have covered it a bit already, but let's talk a little bit more about risk. What is the worst that can happen with this strategy?
Right. And that's one of the huge benefits to the golden one-day options trade and buying call and put premium is your risk is defined up front.
So the worst that can happen with this strategy is that the premium goes to zero and you lose the premium that you paid for the trade on the call and the put side. And that's really the worst case scenario.
So other than if you make an adjustment to the trade, so if you do do anything to change the trade, like converting it to an iron butterfly, that does add risk to the trade. And that's where you potentially could exceed the risk in the original Golden Monday options trade.
So those are all important considerations as well. But as far as the Golden Monday options trade itself, your risk is always defined to the premium that you invest in of the trade. I always ask my guests to place their strategy on a risk profile scale, where 1 is very low risk and 10 is very high risk.
And you are free to define these numbers as you see fit. Where would you put your strategy on such a scale? Well, I would just first of all say that risk is, there's different types of risk, right?
Risk is partly subjective, right, determined by the traders themselves. How many contracts do they decide to trade? So you can give the same strategy to two different traders. One trader trades one contract, the other trades 100, right?
Trader B is going to have much greater risk just based on position sizing. So that partly determined by the trader But to equalize that right and just look at the trade itself I would put it on low on the scale because if you compare it to something like selling a naked call which has very high risk
theoretically unlimited directional risk, this strategy is defined. And as long as you don't over leverage or, you know, use bad money management, I would put low on the scale. It's, you know, probably a two or a three.
There aren't really any other strategies other than buying a call or a put, right, where you can define your risk to that degree. Vertical spreads, right, are also defined risk. So, again, a lot of that just is determined by your position sizing.
What about the assignment risk? So, as an option buyer, there's no assignment risk. and you touched on something important in terms of the trade management
and closing it out, right? So another symbol I do this on is the XFT, which is the mini cash settled S&P options.
So that maybe you forget to put in your limit order or maybe you forget you have the trade on and you're not managing it and you are profitable on one side of the trade, right?
Those contracts will cash settle. But, yeah, essentially you want to, you know, SPY, QQQ, XSP, SPX.
And so you want to make sure that you're closing that out, you have a limit order in place, or you need a cash settled index. But when you do the adjustments that you mentioned mentioned about making it an iron condor or an iron butterfly,
you are adding assignment risks. If you were to adjust it and convert it, then there would be assignment risk. If you, for instance, converted it to an iron condor, right, and then the short strikes on the put or the call side could be assigned
if they're in the money at expiration. And, again, if assignment risks are a concern, you can use the cash settled index like SPX or XSP where again they're cash settled
excuse me cash settled index indices so there is no assignment risk with those but SPY QQQ any of the index ETFs or if you do this on an individual stock and you convert it into an iron butterfly or iron condor then there would be assignment risk
How long have you been trading this subject? Oh, many years. I couldn't get, yeah, I'd have to really go back and think, but it's been years.
And what have been your results from trading it over these years? How do you measure it? Sure. Yeah, so this is one of many strategies that we use inside of our, I run a live trade room.
So I meet with our Altos members a couple times a week in our live trade room. And this is one of the strategies that we trade inside of our live trade room. And I can actually show you the results from our last 25 Golden One Day Options trades.
So, again, this is one of the strategies that we trade inside of our live trader. And we do a lot of other strategies, but these are just Golden One Day Options trades, the strategy that we just walked through. And this is just a sample of our last 25 Golden One Day Options trades that we did.
So it's been very consistent. Again, we don't do them every day, but out of the last 25, we've won 20 of those. So an 80% win rate out of the last 25 Golden Monday options trades.
That's pretty impressive. But have you measured the results of all those years you have traded it? Yeah, yeah, I have. And I would say that's about in line with the win rate and just overall expectancy of the strategy.
So, again, it performs very well in the long run in different market conditions, but you don't want to go out and do this trade blindly. I always tell people, don't just go try this at home. You really want to understand the mechanics of it, the timing of it,
when it's appropriate to put the trade on, how to manage it, when to adjust if needed. And so those are the really important considerations. But, yes, over the long run, it's done very, very well. And about what I just shared with you.
So win rate has been how much? The average results, how much over these years? Yeah, I would say over the years, on average, about 75% to 80% win rate. And on the winning trades, we're generally between a 50% and 100% return.
and on the losing trades, you know, generally in that same range, between a 50% and 100% loss. Let's sum up. How will you sum up this strategy, and then particularly,
what would be your two or three most important takeaways that you really want the audience to remember? Yeah. So I think, again, the big advantage with the golden one-day options trade is it removes the difficulty or the challenge of trying to time or forecast the directional move in the market.
Especially when markets become volatile and erratic, people tend to get whipsawed or chopped up in their trading. And this is, I think, a good strategy for those market conditions when you're not having to predict the market direction.
So it's a market-neutral, non-directional strategy. And so that's a big weight off the shoulders, I think, and one of the reasons I really like this trade. Important takeaways are obviously trade safe, define your risk,
and by nature of the Golden One National Trade, it's a defined risk strategy. But ultimately, you determine your risk. And so I always tell our members at Altos, right, use good risk management, good money management, don't oversize your positions.
But if you want a strategy that, again, removes the directional forecasting difficulty and you want something that has profit potential in the short term,
this trade, because it's short duration, also allows you to benefit from compounding over time. So, in other words, we could turn this trade over rapidly, right? We can do this in a short period of time and then put on a new trade.
So, you don't have this long extended market exposure, right, where a lot of different things could happen and maybe you end up losing money on the trade after you've been in it for a couple weeks. Well, then you've just wasted a couple weeks of time.
So this is, again, a short-duration strategy. You can turn the trade over pretty rapidly. And I think those are some of the main benefits. How does it fit with other strategies that you trade?
Yeah, I think it's a good complement to a lot of other strategies. So I mentioned I do a lot of option selling. In fact, most of my options trading is on the sell side. And I think it's a good idea for most people.
Of course, everyone's different. But at least for me to have an option buying strategy in the mix, right? And so I like to have kind of a diversified, you know, basket of strategies because there isn't one strategy that works perfectly in all market environments.
So it's really important to have a diversified toolbox of strategies that you can use. And so I think this is a good complement to option selling strategies, again, which I do a lot of. But it's also a complement to directional options trading.
So if you're taking directional options trades, maybe you have a lot of bullish trades on at the moment, but no bearish trades, well, if the market sells off, then you're going to lose money, right? You don't have anything or any opportunity to make money on the downside.
So, again, with the Golden Monday options trade, you have opportunity in both directions, and that's where I think it's a good complement to other options strategies. What would be good resources to learn more?
There are a number of ways to learn more. I run a live trade room, so we meet twice a week on Tuesdays and Thursdays, and we are relatively exclusive. We try to keep our trade room pretty small, but there's an opportunity for members to join us.
they can go just to our website. I give some tips and tricks, kind of some pro-level tricks of, you know, exiting with profits. And one of those is, I didn't mention, is to use two separate
limit orders to exit the trade because occasionally you can hit the profit target on both sides of the trade, on the call and the put side, like if the market sells off early in the session and then reverses and rallies later in the session. So I go into all of those, you know,
kind of little nuanced tips and tricks. Would you have a couple of good books about options trading you would like to recommend to other viewers? I'm actually a published author, so I recently published a book.
Although it's not specifically about options trading, it's more about using artificial intelligence in trading. It's called Coded Capital. Of course, I'm biased, but I'll recommend my own book there. I'm thrilled.
But, you know, I have to be honest. I don't read a lot of options books. I kind of prefer to learn by doing, by practicing.
And I know there are a lot of good books out there, but I don't have any specific books that I really read on options or that I recommend. And I will, of course, as always, recommend to watch some of the other interviews we have here on Setup Profits.
We have a number of interviews about selling zero BTE strategies. So I do recommend to take a look at some of them. Also, please subscribe to our newsletter.
You see the link on the screen if you want to stay updated about new interviews and also about our Zeta Live weekly shows on Mondays. Jeff, thank you very much for sharing your strategy with us.
It was a pleasure, John. Thanks for having me.