I am fascinated with this strategy and trying so many different things using its principles. I have hit a brick wall with something I am trying to do. I understand you can create this with no theta decay. So to me if I create a bullish trade, as long as markets stay where they are or go up...I should not lose any money. Also if I create a Bearish trade, as long as the markets stay where they are or go down...I should not lose any money. So that said....if I create a Bullish as well as Bearish trades.....I have limited loss on both sides with 0 theta decay but unlimited potential on the opposite side. So in theory I see this as if the markets makes a small move....I should not lose any money since both sides will cancel each other. If the market makes a big move....I should have a limited loss on 1 side but good profit on the other side. But when I do back test....I noticed that unless markets makes a huge move....I am losing on both sides! Why is this the case? What is the loss coming from? I am available to discuss this on a call if you are available?
@IncomeOptionsTrading
7 ай бұрын
If you look at the individual trade, the slope of the losing side is steeper than the profit side, so if you do both a bullish and bearish version, the resulting risk graph would be a W shape
@pedros8619
8 ай бұрын
Hi, great video!! have you ever tried this for an eanings play? seems interesting
@mikes1330
8 ай бұрын
Is this simply a re-post of a 2021 video? Not sure why it's being re-posted if it is already here on YT...
@IncomeOptionsTrading
8 ай бұрын
I edited the video to improve it and deleted the other one. This one is 7 minutes shorter
@omcincy7622
8 ай бұрын
@@IncomeOptionsTrading It's helpful to me. I hadn't seen it before and happy I found it.
@billmietelski
8 ай бұрын
"remastered"
@Mystery4080
8 ай бұрын
Can you make this to play best on the short side aswell?
@IncomeOptionsTrading
8 ай бұрын
Of course. You just have to flip flop everything
@Mystery4080
8 ай бұрын
I see, flipp flopp😄 Is early assignment a common occurrence with this strategy?
@IncomeOptionsTrading
8 ай бұрын
No, just keep an eye out for ex dividend dates and make sure you don't have a short call with extrinsic value less than the dividend
@CanadianOptionsTrader
8 ай бұрын
I remember this trade from back in 2021! How has it done since then? Have you used it much and/or consistently? I wonder how it would perform in a backtester like Option Omega? It doesn't look very good in Lookback.
@דודסולומון-ט7מ
3 ай бұрын
HELLO THE EXTRINSIC VALUE OF 2 LONG OPTIONS IF Is NOT EQUAL TO THE EXTRINSIC VALUE OF THE SELL OPTION SHOULD IT BE GREATER OR LESS and why? THANK YOU
@IncomeOptionsTrading
3 ай бұрын
I usually like the extrinsic value to be positive, so that if the market doesn't move at all then you still make money, but more importantly you want it as close to 0 as possible.
@דודסולומון-ט7מ
3 ай бұрын
@@IncomeOptionsTrading hello Thank you for your answer ,so if the extrinsic value of the 2 long options isn’t equal to the extrinsic value of sell option it’s better to be less and not greater?even with the zebra I profit when the market moves?
@jaireddy8794
8 ай бұрын
The timing of this video!!! I actually came across this ZEEHBS from your 2021 video, and this week was the first time I put it on (on Tuesday, Monday being a holiday). Unfortunately, this showed a negative PnL by Wednesday and I was afraid it would go into the valley of death, so I took off one long call. Terrible for me, SPY rallied on Thursday and Friday to ATH, and I am watching this trade show negative (because I messed with it). Fortunately, the loss is a small amount relative to the gain from my other theta positions.
@laurencesmith9306
7 ай бұрын
Can u do thus on earnings
@braddeicide
3 ай бұрын
Indeed modifying your trade can mean you ride the loss in both directions
@braddeicide
3 ай бұрын
I like spx because options expire on close, not half an hour later
@tvlamb55
Ай бұрын
How would you do this with long SPY shares so it could act as a hedge.on a long SPY portfolio?
@IncomeOptionsTrading
Ай бұрын
Just don't do the options synthetic short position per (short 1 call, long same 1 put = 100 shares)
@familiasouza889
Ай бұрын
Would this trade survive this monday vix explosion? Tks
@IncomeOptionsTrading
Ай бұрын
@familiasouza889 wouldve been perfect for it if you had it on
@DarkElfio
8 ай бұрын
fantastic video, many thanks. what would be the best volatility conditions for this trade? i guess rising volatility would help
@IncomeOptionsTrading
8 ай бұрын
Low vol would be ideal when you put on the trade. Debit would be less and valley of death would be narrower. Once trade is on then rising vol helps.
@jigneshsoni9263
7 ай бұрын
Will this have 0 theta decay if you took a long position with 1 year DTE?
@IncomeOptionsTrading
7 ай бұрын
if you open it with 0 extrinsic, then it will have no theta decay initially but it will vary as the market moves.
@bluffbattalion
8 ай бұрын
I wonder how different it is if you do the synthetic, but then buy otm puts/calls. You still get the V on the outcome visual.
@IncomeOptionsTrading
8 ай бұрын
That's a long strangle with short stock. Would have a lot of extrinsic value and theta decay.
@jigneshsoni9263
7 ай бұрын
I wonder how would perform if you did it on this on at least 1 year DTE. The underlying most likely would move up or down in 1 year to have a almost guaranteed profits. Also if done on several stocks at the same time would also provide diversification just incase 1/some do not move. Would love to hear your thoughts on this.
@IncomeOptionsTrading
7 ай бұрын
yeah i think it'd be good! just more expensive the longer you go out.
@akshatrastogi9063
3 ай бұрын
bid ask spread will be massive. so coming in the trade and getting out will suck away lot of gains
@omcincy7622
8 ай бұрын
Being on fixed income now, have some capital I want to get the best possible return. I've scalped and done spreads, mainly IC's. If you were to move the 2:1 spread closer, say 427/425 or 427/424, do you have and estimate of how many more SPY shares would need to be used to keep the math the same or improve it? Thanks for any help anyone might provide.
@IncomeOptionsTrading
8 ай бұрын
Hard to say without seeing specifics. Keep an eye on the risk profile, the extrinsic value, and the delta
@omcincy7622
8 ай бұрын
@@IncomeOptionsTrading Well, I tied it today in simulated account. I'm using a brokerage I used 15 years ago, but with all the new improvements gonna give at least a week getting used to using it. I used QQQ, sold 1 slightly OTM 422 call for $324 credit and bought 2 ITM 420 calls for a total of $874. Shorted the QQQ at $422.37 as it was running up fast when I opened the position around 3:30. I was up about $44 in less than a minute, then chopped around between plus $20-$40. Just did worst case scenario, would be down $238 if QQQ were to close at 419.99. So I guess I should either go $1 lower buying ITM calls, or increase the number of shares shorted. I really like this strategy and gonna play around with it in simulated account to fine tune. Thanks for sharing, seems like a potential strategy to minimize losses but make excellent gains. Gonna play around with it with different underlyings and spread sizes, number of options and ideal spread width. Thanks for reviving this since I missed it when it was first posted. Good luck and happy trading!
@closenbaseball
8 ай бұрын
Thanks for the trade idea! What’s your thoughts on placing an iron butterfly trade to hedge against the max loss?
@IncomeOptionsTrading
8 ай бұрын
Changes the trade completely, but you can if you want. Look at the risk profile to help with your decision
@theagemaway
4 ай бұрын
Can you explaining how this is different from just buying a normal straddle? Seems like basically the same effect to me, but with added complexity
@IncomeOptionsTrading
4 ай бұрын
Compare the risk profile of each. This trade shifts the risk profile to the left so that even a no move or a tiny move up will make money. A straddle loses on a small move up.
@sunnyc9974
8 ай бұрын
I already got short positions, how could I hedge it?
@IncomeOptionsTrading
8 ай бұрын
You could buy call(s)
@peterschiffer3582
8 ай бұрын
Thank you. Question, how can I use this (how to create the setup initially or adjust) if I woud like it more as a hedge to the downside than a strategy to gain wins from the upside.... I mean, what can I do to make the valley of death smaller ? Thank you.
@cw722
8 ай бұрын
Genius, but why such short DTE, wouldn't the POP be much greater for longer periods?
@IncomeOptionsTrading
8 ай бұрын
Shorter DTEs allow you to center and adjust more often. You might not be able to catch spikes as well with longer DTEs
@cw722
8 ай бұрын
@@IncomeOptionsTrading ok, thanks. but I'm still thinking if the chance out of valley of death is greater with longer DTE, why the need to adjust often?
@IncomeOptionsTrading
8 ай бұрын
Lock in profits, like you would for gamma scalping
@SilviuRosu
7 ай бұрын
I am trying to figure out the rate of success for this trade. From your video and doing a simple calculation SPY would need to move up ~1% or down more than 3.8% to be in the profit zone. I am taking ~410 and 430 at the threshold points just looking at the video. This means that it is suited for bull markets or strong bear markets. I am true? Do you have any insight on success percent of the trades you placed?
@IncomeOptionsTrading
7 ай бұрын
This is incorrect. If the market moves up at all then you profit due to it being 0 extrinsic value
@craigwhite6489
8 ай бұрын
How do I do this with /MES
@IncomeOptionsTrading
8 ай бұрын
You can do the same setup, just with different strikes in /MES.
@svenskjimand
7 ай бұрын
Thanks!
@IncomeOptionsTrading
7 ай бұрын
Thank you!
@MaxAtLarge
8 ай бұрын
IMO it would have been a better presentation to just explain the entire concept in the first 3 to 5 mins or so. Skip the stock purchase etc. Love you - keep on teaching us!
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