0DTE Explained, Part 2, Intraday trade management of credit spreads.


In this second installment of 0DTE explained, we discuss a few methods to potentially manage intraday risk in credit spreads, and how new trades can close out the risk, and in some cases even add more potential profits to a credit spread that is profitable but with remaining risk into day end. We use an Iron Condor as an example, with discussion of how a credit call spread on the same strikes and a credit put spread can lock in profits, and we also go over an example of how a debit call spread, inside a credit call spread level can lock in profits, while having the chance of significant gains if everything goes correctly. We also discuss how some of these trade management ideas can work in cash-settled names like SPX, but can have risk if used in non-cash-settled instruments like SPY or QQQ. Hope you enjoy!

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Based upon publicly available information derived from option prices at the time of publishing. Intended for informational and educational purposes only and is not any form of recommendation of a particular security, strategy or to open a brokerage account. Options price data and past performance data should not be construed as being indicative of future results and do not guarantee future results or returns. Options involve risk, including exposing investors to potentially significant losses and are therefore not suitable for all investors. Option spreads involve additional risks that should be fully understood prior to investing. Securities trading is offered through Options AI Financial, LLC, member FINRA and SIPC

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