0 DTE iron condor

options trades

[0-dte-ic-blog]

Date: July 14, 2023

Delta on shorts: 18

Delta on longs: 3

Open time: 9:08

Open credit: 2.85

BP: 1,680

Close time: 9:37

P/L: -72

ROC: -4.29%

Date: July 14, 2023

Delta on shorts: 18 put, 24 call

Delta on longs: 5

Open time: 9:37

Open credit: 3.95

BP: 1,605

Close time: 10:44

P/L: 158

ROC: 9.84%

Date: July 14, 2023

Delta on shorts: 15 put, 20 call

Delta on longs: 3

Open time: 2:09

Open credit: 1.60

BP: 1,840

Close time: 2:32

P/L: 78

ROC: 4.24%

Comments: messy start; opening at the start of the first 15 minutes of power hour is tough

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Date: 13 Jul 2023

Delta on shorts: 19 put, 15 call

Delta on longs: 5 put, 3 call

Open time: 9:04

Open credit: 2.80

BP: 1,720

Close time: 11:41

Close debit: 

P/L: 155

Comments: tasty; good time to open; felt like I held it a long time

Date: 13 Jul 2023

Delta on shorts: 29 put, 19 call

Delta on longs: 4 put, ? call

Open time: 2:12 

Open credit: 2.60

BP: 1,800

Close time: 2:33

Close debit: 1.75

P/L: 80

Comments: ETRADE. This was an ugly open. The moment it was on, it slipped into a loser down about 100. Then within a minute it turned around. Lucky for me it filled for 60 more than what I was asking, because I only made 80 on this.

I found out I can't do bracket orders on iron condors in ETRADE or tastytrade. What I'm doing is entering a stop loss limit immediately on open for 30% and then monitoring the position, looking for 60% profit. Neither of these made 60% profit, so maybe I should reconsider these parameters.

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Today I opened a trade right before 9:00 Chicago time and that went smoothly. I closed the trade right when I canceled the Stop Loss Limit because I wasn't staying at the computer. That trade made 235.

The second iron condor I opened just before 11:00, which has not been a good time to open since I've been experimenting with the trade. I realize that trading conditions can change, so maybe in six months or a year this will be a good time.

But I do think that near the end of the first half hour of trading is a great time because there is then typically volatility contraction. It's hard to imagine this changing on a continuing basis. There could be days of selling that start after the open, but it's hard to imagine it enduring. You never know, though!

I attended a tastytrade platform demo this afternoon, and this proved to be very helpful because I learned that they have bracket orders! Therefore, in that account I can set the stop loss limit AND the profit target once the trade has opened. ETRADE doesn't have bracket limits. This is a huge problem, the way I see it.

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Refining Rules

Yesterday I traded too much, which cost me money but helped me improve my system for trading 0 DTE iron condors.

1/ Open trade times: 8:45 to 9:00, 2:00, or when volume is higher on the day

2/ Stop Loss Limit = 30% of credit

3/ Profit Target = 60% of credit

4/ Stop Loss Limit initiated when position opens

5/ Stop Loss Limit canceled and position closed manually when Profit Target reached: this must be watched

6/ Position closed immediately when Profit Target is reached or near: no pennying down to keep more money

7/ Single contracts only for the first three months, then scale up one at a time

8/ Close all orders at least 15 minutes before the close

There is a discrepancy between the total loss on the day, so I sent a message to ETRADE asking about that.

Delta on shorts: 27

Delta on longs: 05

Open time: 10:05

Open credit: 4.40

BP: 1,540

Close time: 11:00

Close debit: 5.50

P/L: -113

Comments: ETRADE, stop/loss close

Delta on shorts: 20

Delta on longs: 03

Open time: 11:00

Open credit: 2.50 

BP: 1,750

Close time: 11:28

Close debit: 3.30

P/L: -83

Comments: tasty, stop/loss close

Delta on shorts: 24

Delta on longs: 04

Open time: 11:05

Open credit: 3.40

BP: 1,660

Close time: 11:30

Close debit: 4.50

P/L: -113

Comments: ETRADE, stop/loss close

Delta on shorts: 18

Delta on longs: 03

Open time: 12:55

Open credit: 2.30 x2 (460)

BP: 3,540

Close time: 1:11

Close debit: 1.00

P/L: 257

Comments:

Delta on shorts: 18

Delta on longs: 02

Open time: 2:05

Open credit: 1.30 x 3 (435)

BP: 5,565

Close time: 2:55

Close debit: 4.05

P/L: -825

Comments: ETRADE, removed stop/loss and didn’t close the position immediately for a profit, 3 contracts is too many

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Here are the strikes, odds, and delta on the three iron condors I traded today. The first two opened at 9:00 after I lowered the credit limit; the first was 2.50 credit and the second 5.25. I put stop-limit orders on them to not lose more than about $100 per trade. When they were definitely profitable and reaching my target, I canceled the stop-limit and put a profit limit order. They both closed between 10:40 and 10:55 with GTC orders. The first made 115 and the second 185.

I then resisted the urge to open another iron condor. My experience last week was that when I open one at around 11:00, it is a huge struggle and/or loses money. I chalk that up to opening at a time in the day where volume and volatility are low. This is my thinking; maybe I'm wrong. But I waited and watched volume in SPX trading.

I then opened the third and final iron condor of the day at 12:49 for 2.75. Again, I opened a stop-limit order to not lose more than about 100, and when it was getting close to my profit target I canceled that and entered a profit limit order. That closed at 1:31 with a GTC for 135.

The total BP when the first two trades were open was 3,125. The total BP for the third was 1,725. The first two trades made 9.6% on the buying power and the third made 7.8%. Like I said above though, I had stop-limit orders to not lose more than about 100 per trade. Last week I entered those wrong and lost hundreds of dollars. I've never used them, so I had to watch a couple of YouTubes about how to do that.

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Descent into lessons

Today started out great and swiftly fell apart. I opened two iron condors at around 8:45 Chicago time and they were immediately profitable. I could have closed the two of them and reached my daily goal of $400, but I set a stop limit order. I was trying to get more out of them while at the same time closing them if they reached a loss of more than 1/3 of the credit I’d collected.

Well, they turned against me, and the orders I’d entered didn’t trigger. So they became big losers. The bigger problem in terms of profit and loss, however, was the iron condor I opened in my other account, the tastytrade one. That I initiated at around 11:00 Chicago time. When the short call got tested, I rolled up the put spread. A couple of hours later, the short put was the one losing money.

I frantically opened and closed and rolled in the ETRADE account, and that all ended with a profit of 55. Meanwhile, I closed the tastytrade position for a loss of 655. So trading SPX 0 DTE iron condors today cost me 600. But the week is up over 500.

However, I learned some lessons. One is that I’m doing something wrong with my stop limit orders, so I should either not use that method or figure out how to do it right. Two is that I shouldn’t try to get every drop of profit out of the iron condor. $200 of profit per iron condor that opens for $300 to $400 is plenty. Three is that those iron condors that I open after 10:00 aren’t working. That’s only based on a couple of trades, but still. It’s not working. Four is that I’m still up more than $500 on the week, and overall the rest of the week went smoothly, so this is a better trade for me than trying to scalp long options or long option spreads.

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This iron condor was opened at 10:47, around when the other two were closed. This one didn't have the same amount of volatility, and then it got caught in the up move that occurred after all the selling. I rolled up the put spread and had to hold this to the end of the day. Lucky for me there wasn't a huge move up in the markets or I wouldn't have been able to salvage this for a small profit. I still made 1.8% on the total BP of 1,100, but it didn't feel worth it.

I wasn't able to set a stop loss on this. It would have closed for a $100 loss if I had. I thought someone said you can set stop losses on tastytrade now, but I didn't see it. Anyway, I'm glad this is done. And I was able to see that iron condors can go against you quickly so traders need an exit plan ahead of time for when the trade is losing.

P.S. I just looked at this spread again and noticed that the delta on it was slightly negative, which I should have thought twice about considering this was initiated after a fair amount of selling on the day.

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I opened this second iron condor a few minutes after the first one. The strikes were closer to the underlying. The odds on both trades were high, probably because there was some volatility after the selling.

Both iron condors closed with GTCs just after 11:00. The total BP was 1,500 so it made over 14% on that, but again, I set a stop loss to risk about 100-150 and no more. The two trades netted $433. The third trade was where things went wrong, but I made it out up $20.

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The markets had sold quite a bit before the open and again during the first hour. I initiated this iron condor at around 9:00. I had to lower what I was asking for it, but it was almost immediately profitable and both this and the second iron condor I opened made over $200 each.

The total risk on this was 1,640, but I set a stop loss so that I wouldn't lose more than $100. The percentage gain on the BP is around 12%.

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This second iron condor of the day was opened at 10:20, almost an hour and a half after the first was initiated. This wasn't for a specific reason other than that I had time before meetings. Like the first one, the puts are 25 apart and the calls 20, and I didn't realize that while the trade was open. I'll be more aware going forward.

The short spreads were closer to the price of the underlying, so I collected 4.10 whereas the first iron condor today I collected a dollar less. This trade closed at 1:35 for a $246 profit, or just under 12% profit.

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This is the first of two SPX 0 DTE iron condors that I traded today. This one I opened at 8:55 and it closed with a GTC limit at 1:40 for a profit of 267. The BP is 2,185, so over 12% profit. It was in the green all day, so I left it and watched it.

Tomorrow I'll start entering a stop-loss order for the entire iron condor after it has opened. So far I've been fortunate, and I want to avoid suffering a huge loss on one trade. Instead of dividing the call spread and the put spread, I'll keep them together. The stop loss will be 1/3 of the total credit on open.

The shorts on this spread were at about 16 delta. The puts are 25 apart and the calls 20. I wasn't really aware of that during the trade. For the second iron condor I opened, which is in the next post, I moved the shorts in to about 25 delta.

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This screenshot is from 10:45, and the position was opened at 9:35 this morning. The markets close at 1:00 today for the July 4th holiday, so it's a short day.

At first, the short put spread was losing more than the short call spread was winning, and I almost put a stop limit for half the total credit collected, which was 1.75. Then I thought about it. In John Einar Sandvand's blog post that inspired me to try this, he says he puts the stop loss for the two separate spreads as the total collected for the iron condor.

When I tried this strategy for the first time Friday, I put the stop loss at 1/2 the total collected for the call spread and the put spread. But then today, I thought, wait a minute: that's what each of the two was worth when the trade was initiated! Then this trade was even, so I left it and went downstairs for a coffee. I didn't feel stressed out about doing that. This trade is much more reasonable than buying a long put with 0 DTE, which I've done, unfortunately.

The maximum risk on this was 1,325 since the trade opened with 1.75 credit and the spreads were each 15 dollars apart. When I came back from coffee, the iron condor had lost a lot of its value because it's a short trading day. 70 minutes after it had been opened, it was over 100 profitable. I set the GTC for .25 and it closed at 12:06 for a profit of 141. That's over 10% in a few hours.

I'm going to continue doing this trade, but now I'll set the stop loss at 75% of the total collected. Sandvand puts it at the total credit received plus 10 and the limit at the total credit plus 20. I don't understand why it's worth putting the limit at total credit plus 20. How do you make more than what you've received?