Options Boot Camp 395: Should You Stop Selling ODTE Options Part 2....The Revenge!!!

And today's episode is actually a bit of a callback.

We're calling back to an episode we did nearly two months ago, episode 388 from April 29th, entitled Should You Stop Selling Zero DTE Options? As you'll recall on that episode, if you heard it, listeners, Dan and I had a little bit of fun.

We did a little bit of rough back of the napkin quick math to determine, you know, everyone's talking about selling the heck out of these zero day options.

Maybe the worm had turned.

Maybe it had gotten to the point like it used to be heading into a weekend with some of the options where markets were overselling these things, and maybe it was actually time to start buying them.

And so we crunched some numbers.

We had a bit of fun, but at the time, it was a very quick analysis.

We didn't really have time to do a deep dive into the data, really pull the data from the bid-ask spreads.

We kind of did a straight SPX open to close versus... a vix one day model so it was a very rough approximation we even said that on the show it was maybe close enough for government work but not exactly close enough for true media analysis but now is the time to revisit it we said you know we're going to come back when we have the ability to actually sink our teeth into some actual back tests and who better to do that than Mr. Matt from Orats.

Matt, I'll run you and the listeners through some of our findings, and I want to get your thoughts on what you're seeing out there from a back-testing perspective.

Like we said, coming into the show, we said, should

you maybe start buying these things? At the time, it was late April, so we did a quick...

Look back

of one month, late March to late April.

Obviously, an interesting time because we were coming right into the start of the ceasefire and a lot of things were going on on the geopolitical front that were kind of rollicking the markets out there.

But nonetheless, we crunched some quick numbers.

We decided that with that small sample size, really.

Didn't really pay off to buy.

We were just looking at straight straddles too.

It was just straight at the money straddles, open to close analysis, very basic.

Only paid off on nine of the 21 days, about 43%.

You lost money on every other day.

And even then, that was a pretty decent payout, usually in a lot of the other periods we looked at.

It wasn't even that good.

We expanded our analysis to the beginning of the year.