Tastylive: 0DTE’s: How to Maximize Profits

The past two years have seen an explosion in options trading. That’s partly due to the rise of individual investors. But it’s also thanks to the rise of daily options trades for market indices. These options allow traders to start and end the day in cash, making a daily profit (or loss).

Options that expire the same day a trade is made is known as a zero-day to expire option, or 0DTE. Some days, 0DTEs can make up half of options trading.

With the growth of this tool have come matching strategies. Learning how to optimize profits from this strategy can turbo-charge your investing profits.

Typically, options trading includes a time component. Traders who expect a company to beat earnings in a week can buy an option with enough time for a post-earnings rally.

But for 0DTE options, strategies such as strangles and spreads are better. These strategies involve using multiple options at the same time to limit risk but still capture the market’s daily move.

As with any options trade, investors should look to take profits on a quick move.

And over time, there’s little difference in taking a small loss versus letting a losing trade expire. Legging positions also helps reduce risk and improve the total win rate.

To view the full results of using a 0DTE strategy, click here.