AI Summary
This video presents a zero DTE (zero days to expiration) options trading strategy on the SPY ETF, claiming it can generate daily profits like $200 with a small account. The strategy involves selling an iron condor at market open when the VIX opens higher than the previous close, capitalizing on accelerated time decay. The trader demonstrates a specific trade that auto-executed at a 15% take-profit level, achieving a 90-92% win rate in testing.
Chapters
The strategy aims to turn the market into a personal ATM, paying $200/day using zero DTE options on SPY. It works best with small accounts under $5,000, requiring $3,300-$3,400 capital for a $200 profit.
The VIX must open higher than the previous day's close. The strategy enters as early as possible at market open because markets rarely trend in one direction all day; they fluctuate, which benefits the iron condor.
Sell an iron condor: sell a call and put at 20 delta, then buy a call two strikes above and a put two strikes below to cap risk. For SPY at 597, the range was 593-601, providing a $4 buffer on each side.
To enter, go to SPY options, select zero DTE. Sell a call at 20 delta (e.g., 602 strike), buy a call two strikes up (604) to limit loss. Then sell a put at 20 delta (596), buy a put two strikes down (594). Total credit ~49 cents.
Set take-profit at 15% of credit received (buy back at 85% of credit) and stop-loss at 45% of credit. This yields a high win rate (90-92%) because the trade has an 80% probability of success from delta selection, and early profit-taking improves it.
For a 23-contract trade with $1,035 credit, take-profit is $155 (15% of credit) and stop-loss is $465 (45% of credit). The trade auto-executed at take-profit, earning $25 profit on a small account.
Zero DTE options decay rapidly throughout the day. Entering at market open maximizes time decay benefit, as demonstrated by the trade that collected $200 profit instead of the expected $155 due to accelerated decay.
This zero DTE iron condor strategy on SPY offers a high-probability, defined-risk approach for small accounts, leveraging time decay and early profit-taking to achieve consistent gains. However, it requires careful monitoring and strict risk management.
Clickbait Check
70% Legit"The title promises turning the market into an ATM, and the video does show a specific strategy, but results are not guaranteed and the strategy carries risk."
Mentioned in this Video
Tutorial Checklist
Study Flashcards (7)
What is the ideal VIX condition for this zero DTE strategy?
easy
Click to reveal answer
What is the ideal VIX condition for this zero DTE strategy?
The VIX must open higher than the previous day's close.
01:07
What is the recommended delta for selling options in this iron condor?
easy
Click to reveal answer
What is the recommended delta for selling options in this iron condor?
20 delta.
03:34
How many strikes apart are the sold and bought options in this iron condor?
medium
Click to reveal answer
How many strikes apart are the sold and bought options in this iron condor?
Two strikes apart.
04:00
What are the take-profit and stop-loss percentages used in this strategy?
medium
Click to reveal answer
What are the take-profit and stop-loss percentages used in this strategy?
Take-profit at 15% of credit (buy back at 85%), stop-loss at 45% of credit (buy back at 145%).
05:14
What is the reported win rate of this strategy in testing?
easy
Click to reveal answer
What is the reported win rate of this strategy in testing?
90-92%.
05:29
Why does entering at market open maximize time decay benefit?
medium
Click to reveal answer
Why does entering at market open maximize time decay benefit?
Because zero DTE options decay rapidly throughout the day, so entering early captures more decay.
07:09
What is the maximum loss on a 23-contract trade with $1,035 credit?
hard
Click to reveal answer
What is the maximum loss on a 23-contract trade with $1,035 credit?
$465 (45% of $1,035).
06:54
💡 Key Takeaways
Strategy Promise
Claims the strategy can turn the market into a personal ATM, paying $200/day with a small account.
Ideal VIX Condition
Specifies that VIX must open higher than previous close, a key technical condition for the strategy.
01:07Iron Condor Mechanics
Explains how selling an iron condor profits from time decay and range-bound movement.
02:05Risk Management Rules
Uses 15% take-profit and 45% stop-loss to achieve high win rate despite small profit per trade.
05:14High Win Rate Claim
Reports 90-92% win rate, attributed to delta probability and early profit-taking.
05:29Full Transcript
[00:00] turn the market into your personal ATM machine that pays you like $200 a day okay and I'm going to show you guys this amazing zero DTE strategy on the Spy a
[00:14] lot of you guys have been asking about zero DTE for instance I just did this minutes ago today this morning as I'm recording this and it took profit it
[00:28] auto executed at the takeprofit level I had already set and yeah it closed out let's see I collected 915 plus 440 and then I bought this back for $150 so this
[00:41] trade Auto executed made me a profit of $25 and a trade like this can be done with small accounts for a trade like this to make $200 it only took around $33 to $3,400 in capital okay so yeah if you have a small account that's under
[00:55] $5,000 a strategy like this might be something you might be looking for so as informational purposes let me show you exactly what this amazing Zer DTE option
[01:07] strategy is on the Spy the ideal situation for this particular strategy the vix needs to open up higher than the previous day's close and as you can see from the chart right the vix closed out right around the 15 level and opened up
[01:20] much higher today in the morning the strategy for this is to enter the trade as early as possible when the Market opens because rarely will a market open up high and keep going high or keep just fall down the rest of the day it will
[01:35] in the middle same thing if the Market opens up super low it's going to try to fill a gap and it's going to fluctuate up and down which will be shown in today's example so the market opened up when the Spy opened up this high right
[01:53] at 830 it went up went down it went up went down went up right so the the key to this particular Zer DTE strategy is that you want that
[02:05] what we're going to do we're going to sell an iron Condor I'm going to take you guys step by step how to execute this trade as well because the the concept is you're getting a credit and you want the prices to fluctuate up and
[02:20] down because time Decay on zero DTE is accelerated that's why that's how people we're taking a credit we're selling an iron comp door and we just want the market to stay within a certain range so for this particular trade what I did and
[02:36] let's look at this when I got into this trade the Spy had had opened right around here and then I waited a few minutes to see what was going on and like 597 or something when I got into the trade and when I got in what I did
[02:51] was I had buffers so if it was at 597 I had $4 to the upside and $4 to the downside I needed spy to stay Within in that range of 593 to 601 when it was at
[03:04] 597 right like 5 minutes after market open and it just needed to fluctuate and time Decay for me to make money and this is how you're going to set this up and purposes only I'm doing this to show you guys an example okay so if if I was to
[03:21] enter this trade right now I'd go SP spy right s Spy bring this up going to trade spy options zero days experation so this would be today first thing is call sell
[03:34] and this is how an iron Condor Works you're going to sell a call contract and then you're going to purchase a call contract so your risk isn't unlimited okay so I'll give you an example and I look for Delta of 20 a 20 Delta is what
[03:48] I like to sell so right now the with the market being at 598 if I click that the Delta is right around 19 right so close enough to a 20 Delta so I would sell
[04:00] this and then you see how the max loss is unlimited right and your max profit is only $35 this is where I buy a call to protect that that's two strikes up so
[04:12] I like to do two strikes buy that and now the max profit is $25 but my Max loss is not unlimited it's 175 okay now we're going to do the same thing with the put so I'm going to put sell and the Market's right here let's look at
[04:28] something that's close to $20 Delta that's at 15 Delta so the closest one would be at 596 which is a 20 Delta so sell the 596 by two strikes down 594 so
[04:41] now we've increased our total credit and our Max loss also went down because we want the price to stay within a certain Target we want it to stay between the two options that we sold the 602 and the 596 so the total credit is 49 cents
[04:56] right now Max loss is this so when I did the trade that I did today I did it for 23 contracts so for 23 contracts at right now it's going to hold that as collateral and what I like to do with this is I like to do 15%
[05:14] takeprofit 45% stop loss and you're going to be like okay why shouldn't it be the opposite where you make more money every this is a very high probability trade so we're going to win a lot more than we're
[05:29] going to lose like since I've been testing out this strategy I'm at almost about a 90 to 92% win rate on this strategy which is ridiculous because even from the get-go I'm picking strikes that are already giving me an 80% chance
[05:43] to win because when the Delta is 20 that means they'll expire out of the money 80% of the time and because I'm taking my profit so quickly it helps even more with that so I'm taking profits a lot quicker than letting it play out the
[05:57] whole day where I end up taking a loss so with that being said if I was to get say 40 45 cents credit on this I would take I would set my take profit at keep
[06:09] selling buying it back at 85% of it right because I want to keep that 15% profit so times 085 I would set my takeprofit at 38 cents and then for my stop loss times 1.45 cuz that's 45% I would put my stop loss at 65 cents and
[06:26] this is how this amazing strategy works works because you're collecting 15% of that Max profit and when you're closing out you're losing 45% of it so for
[06:38] instance on a trade like this yes it's like oh my God 45% am I going to lose 45% of this $3,500 no you're going to lose 45% of this 1,000 let's see if you're taking 1,58 in credit which it shows right here 1,35 right so let's do
[06:54] 1035 * 045 so your loss on a trade like this would be $465 but your and your take profit would be 155 right and the premiums are less because part of the day is gone this trade works best when you enter at Market open because that's
[07:09] when you're because by by now right now it is 9:30 Central so it's 10:30 Eastern the Market's already been open a little over an hour so a lot of the Decay has
[07:21] already happened because the market day is so short because this is zero DTE and that's why I was able to collect $200 in profit ins of 155 because of that time Decay that is the beauty of this particular Zer DTE
[07:36] strategies as the day goes on these options deteriorate and you make your money because of that time Decay and this is something that I posted in my patreon when I got into this trade when I exited when the auto takeprofit had
[07:49] hit walked away with $25 in profit and I posst these trades all these kind of patreon last week that were pretty good trades so if you guys want to see all
[08:02] resources check out the link in the description below to join my patreon and guess what for right now it is only $9 a month so check out the link in the
[08:15] description below join my patreon join the chat ask me any questions that you guys want I will see you guys on the next one