CBOE

EmpathyFabrication

Well why not? There's similar RoR for doing a basic putwrite strategy on SCHD and I end up with a good ETF if assigned, and similar net yearly distributions. Doing a basic buywrite strategy on KO beats or matches for example ULTY. In fact just buying and holding KO and collecting the .51 dividend probably beats ULTY. The only question YM fanboys need to answer is why YM funds can't maintain NAV while also failing to beat the CBOE buywrite.

jasperCrow

The amount of PLTR puts that are about to be bought at open are gunna crash the CBOE

Galadon17

Just saw this and yes, charm is pretty useful towards the end of day especially for 0DTEs. Gamma and vanna exposure matter more towards start and mid day, this is for trading ES using SPX options greeks. You'll have a positive charm zone below spot (which has a bearish pressure on the underlying) and negative charm above spot (which will have a bearish pressure on the underlying). The only issue is finding accurate data for trading this. I wouldn't use spotgamma since they use OI as a stand-in for matchmaker's trades, you need to go with a provider that uses trades flow analysis or something like direct CBOE data which actually provides market participant info. I do have a working model using OI (one that I made myself for personal use) and it is fairly accurate, but I'm working towards making enough money with my current model to buy CBOE data. Not selling anything, but just stating that the easy part is building the model. The harder part is getting accurate data, since almost every so-called "GEX provider, vanna exposure provider and charm exposure provider" has different data. Great models but ultimately it boils down to how bad do you want it to be accurate. And I don't think these so-called providers really care enough to get the most accurate data, since there isn't really much of an incentive for them to do so if their current models already get them enough subscribers.

Ma4r

Only NIFTY have intraday OI data, for CBOE, you need to estimate on your own

Party_Difference_442

Do be careful, VIX are through CBOE and they are notorious for assigning at expiration. I moved away from $VIX because of that. If I may say, there are some who say stocks are just like gambling, which is false in many ways because in gambling you win or you lose all the money that you put on the line, while in stocks you mostly have a chance to get out and save some of your capital. Vix though is the closest stocks get to gambling, if we stretch our analogy of stocks and gambling.

DoubleFamous5751

One of the companies most of you regards(couldn’t be me) use everyday is looking real 🥵 on the daily chart. CBOE , they make markets so us regards (and almost every major market player) can gamble via options derivatives. Buying companies you use every day is a good strategy. https://preview.redd.it/h7dfpcghnqyf1.jpeg?width=260&format=pjpg&auto=webp&s=e7a1d4f9d4181a2259ce6b409a226eabceb5b62f

PapaCharlie9

Keep in mind that market makers and wholesalers are for-profit businesses. They have no incentive to share that information with anyone, let alone their competitors or for free. The closest you can come is per-exchange order books, which integrates the net activity of all the market makers involved in a contract series on that exchange. Which means having some kind of license or access to each exchange in question. Since you only want SPX, that narrows it down to CBOE. The level of access you want might only be available to broker-dealers, so that would mean you'd have to find a client facing API or broker platform that provides that data (insofar as they are licensed by the CBOE to republish such data). Notifying /u/Ken385 for further enlightenment.

Damerman

The CBOE matches the longs and the shorts of options contracts overnight. Someone literary triggered this event. Its not any particular limit order for shares that triggers this event.

NOMERCYDLKH

!banbet CBOE 2.5% 1D

NOMERCYDLKH

Thoughts on CBOE?

alex_on_redd1t

i'm buying CBOE $235 calls for 10/31. balls deep.

SDirickson

No, the technical definition has nothing to do with any of those. It's right there in the CBOE's Service Mark Registration for "LEAPS": "Option Market Services; namely, facilitating the trading of options of extended length on stocks and stock indexes in Class 36 (U.S. CL. 102)." "extended length" has come to be widely accepted as being "more than one year", though the registration doesn't actually quantify it.

No-Mail-1200

There is a public platform that shows customer, firm, and market maker volume. CBOE

greytoc

Ibkr options trading doesn't sleep. The maid brings you an energy drink so you can keep trading. Ibkr is only retail broker that I'm aware that supports CBOE GTH options trading. And there's also futs and fops.

Ken385

CBOE is just an exchange that an order may be filled on and almost all trades here will be filled electronically, not on the floor. Floor trades occur here mainly in the SPX and VIX products. There is a specific tag that tells you what type of order it is (unfortunately some brokers time and sales information may not pass on this tag) You can see a list of the tags here, [OPRA\_Pillar\_Input\_Specification.pdf](https://cdn.opraplan.com/documents/OPRA_Pillar_Input_Specification.pdf) starting on page 26.

stonkflipper

What tag is it? CBOE? Is it correct to assume all trades routed through CBOE on time and sales are floor trades?

Ken385

There are only a few exchanges that have floors, the CBOE being one. If you just wanted the order routed to the floor, the trade desk would need to send the order to a floor broker. You can actually see which orders are filled on the floor, as there is a special tag in time and sales indicating how it was filled.

y1pp0

You're correct. I just double-checked [myself ](https://cdn.cboe.com/resources/membership/US-Options-Complex-Book-Process.pdf)and was wrong. CBOE exchange can and will fill your iron condor by matching it against four separate orders. They state the best price available for a complex order can often be obtained by legging the complex order into the individual series books.

stonkflipper

On a separate note, are there any specific exchanges that route floor trades only? Is that the CBOE? Does anyone have any exchanges that they put more value into watching flow from than others? I’m wondering if you could filter out retail flow and just focus on institutional if you change your filters to only include certain exchanges?

NationalOwl9561

My friend you don’t even know what CBOE offers. They literally offer LIVE 10 minute and now even 1 minute tagged data. Go educate yourself before spreading misinformation. https://datashop.cboe.com/product-enhancement-10-minute-interval-open-close-data-now-available-for-c1-c2-bzx-edgx

mollylovelyxx

they're guesstimating it using algos just like all the other services the same way the person you are responding to is guesstimating it, there is no "official" MM gamma for makers except tagged data from CBOE which you can only get after market close. The only way to get official inventory is by being the maker yourself

NationalOwl9561

Because I’ve cross compared with other CBOE data services. The data literally gives you the calls/puts bought/sold. In 10 min updates.

dvdmovie1

RSG is certainly AI-proof. "Will NVIDA keep giving at least 20% annual returns like it historically has done for the past 10 years" I've owned NVDA for years - for the company to get back to my cost basis it would have to be in financial trouble. It's been a particularly amazing stock for the last few years, but before that I sat through more than one 50%+ drawdown. You had close to a 40% drawdown earlier this year. It's currently a 4.5T company. Do I think it will continue to be a good company? Yes. Do I think it will repeat this run and become a 9T company? No. Too many people think the market of the last 5 years can continue indefinitely and everyone is all-in on the same stocks. I trimmed a bit of NVDA last year, trimmed a bit more this year. Do well while this unusually fantastic period for investing continues but I just think people shouldn't get too into the mindset that the escalator up goes to the moon. Twice in the last 5 years (2022, 2025) people gave a lot of the fantastic gains from the prior two years back in a hurry and how many people sold at some point in those declines and didn't buy back, or wound up buying back higher eventually? "dividend ETF" I don't think you should go with a dividend etf either. IMO, create a diversified portfolio that has a portion devoted to aggressive growth themes/names, but don't make it every single stock that everyone else has. Find 1-2 things that are the next thing. That's a portion of your portfolio and if it's a portion of your portfolio then it forces you to be selective rather than buying every growth stock that sounds interesting. Take the other portion of your portfolio and find high quality/slow growth (preferably buying when the names are oversold/temporarily out of favor) and maybe a value idea or two. This portion of your portfolio is the foundation - steady, high quality, well-managed companies that have delivered year in/year out for years. Not something as conservative as KO, but to use the example of RSG, something like that. SPGI, AXP, CBOE, MA, JPM, etc. etc (not necessarily those but something along those lines.) These are probably not going to be that exciting, but when the market turns, you're going to likely lose less here. The lowered volatility of this side of your portfolio offsets to some degree the likely higher volatility of the other side. When the market isn't "growth stocks only go up", you'll be happy that you have at least some buffer rather than a portfolio full of highly speculative growth names that are going to lose half the next time there's a 2022 or early 2025. You're talking about the very long-term (which is good! too many people have turned too ultra short-term with investing) and I think what I'm trying to suggest is how do you create something broadly that you can stick with through good times and bad (and there will absolutely be other bad market times in the years ahead.)

devnah721

Technically CBOE is the counterparty to every option, however, they wont' sell you a call, unless someone sells them one at the same time. They don't play the market, they guarantee it.

dimethylhyperspace

The CBOE

NationalOwl9561

Market maker gamma. SPX is unique in that only CBOE exchange is responsible for the data. It’s extremely expensive but there are a few resellers who sell at a monthly subscription to use the gamma data.

CapoDoFrango

Ok, that is weird. I'm also European but I trade standard american options, and I have lot of experience trading options, more than 5 years worth, from 0DTEs to LEAPs on Indexes like SPX to individual stocks and even more. And I have to tell you, that I don't have any idea about what you are trading here, but this seems clearly suboptimal. How much fees are you paying for that? What is the spread? Is this priced on EUR or USD? I suggests that you should try to get an account at IBKR (interactive brokers) and try to trade standard US options (like those offered by [CBOE](https://www.cboe.com/markets/us/options) and other similar US option exchanges that you can find at IBKR easily)

PirateLlamaLLC

Exact same situation I am in. Bought 4 0dte SPXW $6700 puts on 10/22 at 11:40a EST for $9.30. Sold order filled at 11:43a EST for $27.00. I go on my day like everything’s fine. My puts disappeared from my account because they were sold. Puts reappeared at 3:09p EST but I didn’t see them until about 3:30. Market had taken a turn and the puts were losing value fast. Didn’t know what to do. Attempted to call Rhood calling it an emergency. No response. They didn’t respond to my support ticket for 2 hours. Puts expired worthless causing me to lose the initial investment and the profit. Out $10,800 total. Devastated my account. Actually put me in a margin call because I had already flipped the sale $ into new calls. Robinhood never reached out to me to offer any explanation until 3:55p EST via email. According to them, they didn’t get notified by CBOE abt the busted trade until 3:14p EST.

Scannerguy3000

I know. It’s not just their research. The CBOE and other academics have done the same. In my experience, I have a higher yield with weeklies, rotating the cash faster. There could be other factors involved that I’m not accounting for.

genuinenewb

I'm surprised CBOE bust an SPX option when the technical issues were with them

I_am_Nerman

This is the one I remember the most. It was at Schwab. It was CBOE that cost the guy 6 figures. https://www.reddit.com/r/options/s/2Orf4y0PQm

Dumbest-Questions

It seems that you are making stuff up. Regardless, CBOE CO must consist of two or more different series in the same underlying security or index. It’s in the exchange rules. If you’re implying that IB offers such a service, while I have never traded through them, I would be surprised if they offer any kind of limit order on mixed basket like this. Anyway, good luck to you too

Dumbest-Questions

I honestly don't think this is your case, but it's possible to get filled worse than the limit order when leaving order in COB. The only real cause would be trade-through via complex order book routing. Basically, there are two mechanisms to how a COB order can be filled in SPX, via direct MM response to a CO or by fills against resting implied orders (i.e. the spread is synthesized from single-leg order books). As a result, you can theoretically get a worse fill if any legs executed through implied orders had prices move before the combo execution was confirmed. While there is no clarity on this, here is my understanding of WTF. Technically, CBOE COB enforces combo-price protection, but with caveats that latency and stale quotes can allow a fill slightly outside displayed legs’ contemporaneous marks. Since complex orders that they are not subject to the same protections against trade-through as single-option order, the exchange could let it stand if the implied leg(s) were also customer limit orders. Essentially, if the choice is between breaking some dudes limit fills in single options or breaking your CO limit, they will rule in favor of stronger protections.

Dumbest-Questions

> They decide once they see the order how to split it up and/or route it to which pool/market maker. It has nothing to do with market makers or pools since SPX options are single-listed on CBOE. You can sometimes get worse fills on CBOE COB (even though it fully supports multi-leg limit orders and has limit order protection), though it's pretty rare.

Ma4r

???? It's called a busted fucking trade, every single exchange has this rule. Robinhood didn't bust their trade, CBOE did

Regular-Hotel892

Fair enough, if that is what happened, that still sounds like CBOE’s fault and it’s unclear to me why the customer would pay for that aside from CBOE being greedy lol. But I get it and agree, if the buyer had $43 or whatever on the offer and clicked market buy and got $50 I’d be pissed too. I’m personally never clicking market buy on any option contract CBOE really should make both of them whole here though in my opinion. If this trade somehow went off for $200, that’s a different story… my overall point is this is not so ridiculous and abhorrently mispriced that OP (or sure, the buyer if the book was skipped) should be punished for it, but the rules are what they are so…

kegger79

Your perception that I was condescending is upon you. How you perceive it has much more to with it than how I meant it. That context is lost in words on a screen vs. in an actual conversation. Please understand that it was not my intent for it to be an ad hominem attack. Now it's not semantics. Yes, I'll agree there's an exchange of communication or information between a customer and their platform or broker for order execution and fulfillment. That's entirely different from the physical exchange, which is the CBOE. The place where the orders actually occur. There's even an exchange of information between HOOD and the CBOE. Like many words, there is more than one definition based upon the context. That is applicable here. There is importance in understanding the difference. When one has a misunderstanding of the working nature of things. Then sincerely presents information while holding the opinion that is contrary to how it actually works. There is so much misinformation and mythological bullshit presented to separate people from their hard earned dollars. I'm a capitalist at heart who believes in retail. Having a basic understanding of the workings allows greater confidence in oneself that contributes to success. ✌️

kegger79

It wasn't a failed order execution. It was executed and later busted by the exchange due to improper pricing. There's obviously a communication issue in this instance by either CBOE to HOOD, and HOOD to customer or both. It's not a failure of execution that can be blamed on either.

kegger79

No the CBOE is the exchange as in Chicago Board Options Exchange. HOOD is the broker and the platform you trade through to have your orders executed on the exchange. Are you trading or investing? If so please educate yourself. People need to know and understand this. It isn't hard it takes a little bit of time and effort that's worthwhile.

snark42

RH and then customer should have been notified 90 minutes after the trade executed that it was busted. Not sure if CBOE or RH failed to notify here, but I'm guessing it was RH failed to notify customer in time to close the position again.

Ken385

Exactly. I quoted this rule in my comment and even if they followed the bust properly, RH needed to be notified promptly according to the rules. OP didn't find out until after the close, so either the CBOE or RH delayed the information.

CoCandBrawlTorture

The CBOE robbed you. Not Robinhood. It’s simply RH’s responsibility to let you know as soon as they can, which I guess they tried. This shit is a fucking horror story honestly. Thought it can’t happen on Robinhood but look at me being wrong. Search “TRADE BUSTED” on various subreddits and you’ll see examples from Webull & Schwab users.

OsoPlato

You should review the CBOE rule book to see if this was properly handled according the rules. See Rule 6.5. Nullification and Adjustment of Option Transactions Including Obvious Errors

Ken385

I went through time and sales for you. Your order was filled at 9:30:43 pt and the bust was posted at 10:58:37 pt. When your order was filled, it seems the CBOE was having issues. There was a failure from OPRA (Option price reporting authority on that day which caused a lot of issues, not only with the CBOE but other exchanges as well). At the time your trade occurred, quotes were all over the place, including no quotes, no offers and prices that varied a lot. Under pre approved rules, the CBOE can bust a trade if it is an "obvious error" There are steps and time limits involved. They will then notify RH. These type of busts happen more than you might think. It sucks that you, the customer has to suffer vs the exchange, OPRA, or other parties involved, You did nothing wrong. Your complaint here which I think you will get the best result, is the length of time it took them to notify you. If the bust was posted in time and sales at 10:58 pt, you should have been notified long before the close of trading. Either the CBOE notified RH late or RH notified you late. If you file a complaint with FINRA, you should reference this time lag.

Regular-Hotel892

Sounds like CBOE busted your trade… So the answer to your question is no. You got robbed by CBOE, not Robinhood. Still bullshit though

Dry-Conversation-570

CBOE did have some legitimate options price quotes errors this week.

GoZukkYourself

CBOE: Today's option volume of 64.0M contracts was -11.00% below recent avg levels, w/ calls leading puts 10 to 7. Single stock & ETF products saw relatively heavy volume, while index flow was moderate. Today's most active sectors included Consumer Non-Cyclicals, Telecommunications, & Consumer Cyclicals, while Basic Materials & Industrials were relatively light. Among the 500 most liquid single stocks, 30day IV was higher for 134 & lower for 291.

MaxDragonMan

If you mean CNN's fear and greed index I'm not sure - but you can use VIX (Chicago Board Options Exchange's CBOE Volatility Index) instead. Through my broker you can set alerts at 'x' price or 'x' time of day - and the VIX should at least somewhat match the fear/greed index each day.

jarMburger

Here’s the [CBOE file on SPX](https://cdn.cboe.com/resources/spx/spx-fact-sheet.pdf) that should answer most of your questions. Option profit calculator is often inaccurate/imprecise due to bid/ask spread, assumed IV and etc. they’re only good in giving you the profit/loss at expiry.

curiouslybilingual

That can work, but options market is having connections and lag issues today. Was announced by CBOE. Pricing and fills weren't going through

christopheroptions

CBOE: We want to extend options trading hours 2 hours earlier and 15 minute later. \* not even 1 week later\* data is fucking down for options contracts LMAO 🤌

fourfastfoxes

"\*CBOE SAYS OPRA PROCESSING ISSUE AFFECTING OPTION QUOTES" -- I sat with an order open for the ask for 2 minutes before realizing there was a bug and I should cancel my order

Wheres-my-dividend

China sold all options at the CBOE

christopheroptions

data is down for options contracts and CBOE wants to extend options trading hours 😂😂😂😂😂😂😂

EmpathyFabrication

People use them because they give high ROI monthly returns. That's it. Most people aren't reading the prospectus of the funds they invest in and don't understand the options strategies behind these CC funds. If they did they would just copy the CC strategies outlined in the funds themselves and skip the fees. If a CC fund can't beat the CBOE buywrite benchmark there's no reason to buy it. Ask yourself you're gonna buy Yieldmax why not buy a CC fund that maintains NAV and pays out a similar dividend?

Living_Delivery_3301

When CBOE daddy says so

Recent_Register_2952

CBOE has submitted a proposal to the SEC seeking to expand options trading hours, introducing a pre-market session from 7:30 AM to 9:25 AM EST and a brief post-market session running from 4:00 PM to 4:15 PM YES PLEASE

jo1717a

What information? Tasty videos and CBOE data site.

greytoc

If you are really serious about learning to trade options - it's not really the kind of thing that you just wing. If you want educational resources - read at least one of the recommended books on derivatives in the wiki - [https://www.reddit.com/r/investing/wiki/readinglist/#wiki\_options\_and\_derivatives](https://www.reddit.com/r/investing/wiki/readinglist/#wiki_options_and_derivatives) You can also find educational resources here in the OIC education web site. The OIC or Options Industry Council is a service by the OCC whose members are the various option exchanges in the US like the NYSE and CBOE. Link here - [https://www.optionseducation.org/](https://www.optionseducation.org/) There are webinars that you can attend and free blog articles. The Getting Started section here - [https://www.optionseducation.org/optionsoverview/getting-started-with-options](https://www.optionseducation.org/optionsoverview/getting-started-with-options) is a great place to start. The CBOE which is the largest listed options exchange in the US provides free education at the Options Institute here - [https://www.cboe.com/optionsinstitute/](https://www.cboe.com/optionsinstitute/)

jo1717a

Just don't pay attention to their 0 DTE studies. It's quite laughable their 0 DTE data is at 10 minute intervals. They are sponsored by the CBOE and the CBOE themselves sell 1 minute interval data for like $3000 yet Tasty has been using 10 min intervals for 0 DTE for the past few years now.

Ken385

You have been told incorrectly. This is untrue. It is up to the brokers or the firm that clears the brokers trades (such as Apex). Market makers are actively quoting SPX options in the after hours. They want as much business as possible, especially pure customer business, as does the CBOE.

quiethandle

So... 15 minutes after the close... Most companies that report earnings after the close do so within that window. Could you imagine the bid/ask spreads on NFLX options at 4:05pm as the stock is whipsawing around by $20 every tick? Holy hell... After we get to see how much the market makers want to screw the retail traders by making the weekly expiring 1200 strike call go $1 bid - $50 ask. Nice. The CBOE might want the 4pm-4:15pm session to be open, but I guarantee the market making firms would NEVER make a good market for those options. But after they try to screw us with bid/ask spreads so wide you could fit Mr. Orange's waistline through, we might get to see IV collapse in real time.

GoZukkYourself

CBOE is now looking to extend options trading hours, adding a pre-market from 7:30–9:25 am ET & from 4–4:15 pm, as the options boom keeps running hot Total CBOE options volume has jumped nearly 70% since 2023, and you can literally see the craze for options rising. https://preview.redd.it/c57lxbkm4dwf1.jpeg?width=1118&format=pjpg&auto=webp&s=d94f804be3206c7dc9269b973fff987a72dbeb7e

Spear_n_Magic_Helmet

CBOE is serious about extending options trading hours? I’m so fucked

SocraticGoats

Is CBOE comping my hotel room or what

Impressive-Bee-5183

**TL;DR: Not bullish or bearish for the market. Slightly bullish for CBOE stock maybe? But mostly just "meh" for us retail traders.** Alright, so here's the deal - CBOE wants to add pre-market (7:30-9:25 AM) and after-hours (4:00-4:15 PM) trading for regular equity options. Think SPY, QQQ, individual stocks like AAPL, TSLA, etc. # Why this isn't the big win you think it is Look, I've been trading options for years and extended hours trading is... not great. Here's what nobody's telling you: **The liquidity is gonna be ASS.** During extended hours, you get way fewer market participants, which means wider bid-ask spreads and your orders taking forever to fill. You know how you complain about getting filled at midpoint during regular hours? Lmao good luck with that in pre-market. **Volatility on steroids.** With fewer participants, some whale can come through and absolutely wreck pricing with a single large order. You could be sitting on what looks like a winning position and then boom - some institution dumps during extended hours and you're screwed. # "But what about reacting to news?!" Yeah yeah, I know. Extended hours DO let you react when big news drops outside regular trading. Remember when COVID news would drop overnight and futures would gap? This could help with that. But here's the thing - **you're competing against institutions who have better infrastructure, better fills, and actual risk management.** They WANT you trading in extended hours because they're gonna make bank on the spreads. # Who actually benefits? 1. **CBOE** \- more trading hours = more fees. Cha-ching 💰 2. **Market makers** \- gonna feast on those wide spreads 3. **International traders** \- this is really about letting non-U.S. investors trade during their local hours 4. **Institutional hedgers** \- need to adjust positions 24/7 # My take as someone who's been doing this a while This is CBOE trying to stay competitive since they're the first exchange proposing equity options outside regular hours. It's a chess move, not a market signal. For us retail folks? I'd probably mess around with it for earnings plays or when major economic data drops pre-market, but I'm not gonna pretend this is some game-changer. The juice probably won't be worth the squeeze for 95% of trades. **Pro tip:** If this gets approved, wait like 3-6 months before trading extended hours seriously. Let the liquidity develop and the market makers figure out their pricing. Being an early adopter here = paying the stupid tax.

Ken385

If approved, brokers would still need to allow access to the session, and they may not. Currently the CBOE has extended hours for SPX, XSP and VIX options and almost all retail brokers don't allow access to this session (with the exception of IBKR and Fidelity for a small part of it) Still interesting to see the outcome, thanks for the post.

derpyou

Alright, let me be brutally honest with you because I've watched too many people learn this lesson the expensive way. #Your Sample Size is a Joke September 9 to October 17, 2025? That's maybe 27 trading days. You're basically saying "I tested my parachute by jumping off my couch 27 times and it worked great!" You know what didn't happen in your testing period? * Federal Reserve surprise rate decisions * Major bank failures (like SVB in March 2023) * VIX spikes above 35 * Flash crashes (August 2024's Japan carry trade unwind hit 6% intraday) * Earnings surprises from mega-cap stocks that move SPY 2%+ * Geopolitical shocks (remember when COVID first hit and SPY had multiple 5-10% days?) Your backtest caught the market equivalent of "sunny with light clouds" weather. Cool. Now what happens during the hurricane? The Math is Hilariously Bad Let me break down what you're actually doing here: "both wings together cost only 10% of the Premium that we collected" So you collect $2.78 in premium, spend $0.28 on protection. That means: * Maximum gain: ~$2.50 per contract (minus $6 fees = $2.44) * Maximum loss: Depends on wing spacing, but looking at your purple lines, it's probably $15-50+ per contract You're risking 20-30x your maximum gain. This is literally the definition of a negative expectancy trade. You need to win 95%+ of the time just to break even over the long run. And spoiler alert: you won't win 95% of the time when volatility comes knocking. Look at your own equity curve - you're grinding out $50-150/day profits, but those purple max-loss lines show potential $1,000+ losses. One bad day wipes out 2-3 weeks of gains. #Why This Strategy Has a 100% Historical Failure Rate This isn't theoretical - this EXACT strategy (short vol, collect premium, minimal protection) has destroyed countless traders and funds: * OptionSellers.com (2018): Professional fund that sold options. Lost clients $150 million in a single November day when natural gas spiked. Guy had to release a crying YouTube video apologizing. * LJM Preservation and Growth Fund (Feb 2018): Down 82% in THREE DAYS during the Volmageddon event. $1+ billion fund, gone. * XIV ETF (Feb 2018): Short volatility ETF, lost 90%+ overnight and was liquidated. People had their entire retirement accounts in it. The pattern is ALWAYS the same: 1. Make steady profits for months (just like your backtest) 2. Get confident, increase position size 3. Volatility event hits (happens 1-3 times per year) 4. Lose 6-12 months of profits in a single day 5. Either blow up completely or quit #The Real-World Execution Problems ###Bid-Ask Spreads Explode During Volatility Your backtest probably uses mid-prices or last-traded prices from Yahoo Finance. In reality: * Calm market: SPY 0DTE spreads might be $0.05-0.10 per leg * Volatile market: Spreads widen to $0.25-0.75 per leg When you need to exit a losing position at 3:45pm because SPY just dropped 1.5%, you're paying the ASK to close your shorts and hitting the BID to sell your longs. That's $1-3 per contract in slippage across all four legs. On a $2.78 credit, you just lost 40-100% of your profit to slippage. Your backtest doesn't account for this. ###You Can't Exit When You Actually Need To At 3:55pm on a volatile day, try getting filled on a 4-leg iron butterfly at reasonable prices. Market makers KNOW you're desperate. They'll quote you garbage. Your options: * Eat massive slippage (50%+ of your credit) * Let it expire and pray SPY doesn't land near your strikes (pin risk) * Get assigned and wake up Monday with positions you didn't want ###Yahoo Finance Data is Garbage for This "This Data is collected via Yahoo Finance" Yeah, no. Yahoo Finance options data is notoriously bad because: * 15-minute delay means stale prices * Shows last traded price, not real-time bid/ask * Doesn't capture the actual order book depth * Many strikes have zero volume and stale data The reason CBOE DataShop costs $2,000 is because it's REAL exchange data with actual quotes. Your backtest is like planning a road trip using a map from 1995. ###Pin Risk Will Destroy You You're trading 0DTE that expires at 4:00pm. If SPY closes anywhere near your short strikes (within $0.50), you have massive pin risk: * SPY closes at $580.05, your short call is $580 * You get assigned on the call (now short 100 shares) * Your $582 long call expires worthless * Monday morning SPY gaps up to $582 * You just lost $200 per contract overnight This happens ALL THE TIME with 0DTE and it's not in your backtest. ###Margin Calls at the Worst Possible Moment At 3:45pm, SPY drops 1%. Your position shows a $2,000 unrealized loss. Interactive Brokers sees you're under margin requirements and force liquidates your position at market prices when spreads are widest. You don't get a choice. You don't get to "wait it out." They close you out at the worst possible prices, locking in your loss. This is literally in IB's margin policies - they can liquidate without notice. What Your First Real Month Would Look Like Days 1-8: 1. "Holy shit! I'm making $100-150/day! This is amazing!" Total: +$1,000 2. Day 9: Small loss, SPY moved 0.8% in last hour. Close at -$350.Total: +$650 Days 3. 10-15: Back to winning. Confidence restored. Total: +$1,500 4. Day 16: CPI data comes in hot. SPY drops 1.5% in 30 minutes at 2:00pm. You try to close but spreads are 5x wider than normal. You panic. Close for -$1,800.Total: -$300 5. Days 17-20: Reduce size, scared. Make tiny gains. Total: +$100 6. Day 21: FOMC announcement. SPY volatility explodes. Your shorts go deep ITM. Margin call. IB liquidates you at terrible prices. Final loss: -$2,500 Account blown by 25% in less than a month. #The Statistical Reality Check You need to backtest through these periods (at minimum): * March 2020: COVID crash, SPY moved 5-10% daily * February 2018: Volmageddon, VIX 15→50 overnight * August 2024: Japan carry trade unwind, SPY dropped 3% in minutes * March 2023: SVB banking crisis, massive intraday swings * All of 2022: Constant 2-3% daily moves in bear market I guarantee your strategy would have multiple -50% to -100% drawdowns in those periods. Not because the strategy is bad in theory, but because the risk/reward is fundamentally broken. The Warning Signs You're Ignoring Your own equity curve is screaming the problem at you: * Small consistent gains: ✓ (classic premium selling) * Occasional larger losses: ✓ (classic blow-up pattern forming) * Maximum loss WAY bigger than maximum gain: ✓ (terrible risk/reward) * Short time period: ✓ (haven't seen a real volatility event) This is textbook "works until it doesn't" strategy. What You Should Actually Do If you're dead-set on doing this: 1. Backtest 2020-2025 minimum 2. Paper trade for 3 months - Not backtest, LIVE paper trading to feel real execution 3. Risk max 1-2% per trade - If your account is $10K, risk $100-200 max 4. Skip high VIX days - If VIX > 20, don't trade that day 5. Have mechanical stop loss - Close at -3x max gain, no exceptions 6. Don't trade around events - No trading on FOMC, CPI, NFP days But honestly? Just don't do this. The math doesn't work. You're picking up pennies in front of a steamroller. The Bottom Line Truth Your backtest shows this works when: * Markets are calm ✓ * Volatility is low ✓ * No major news events ✓ * SPY moves less than 1% ✓ Cool story. What happens when any of those conditions change? Because they WILL change. Regularly. The question isn't "can I make money in calm markets?" It's "what happens when the market isn't calm?" Answer: You lose 10-20 days of gains in one trade. Then it happens again a month later. Then you quit with a blown account. I'm not trying to be harsh - I'm trying to save you money. This strategy has a 100% failure rate over long enough time horizons. It's not if you blow up, it's when. If you have $10K and you're willing to lose $3-5K learning this lesson the hard way, go ahead. But don't say nobody warned you when you lose 6 months of profits in a single Thursday afternoon because Powell said something unexpected. The graveyard of retail traders is paved with profitable short-vol backtests. Good luck, you're gonna need it.

80delta

I trade GC futures, and its a great tool to follow for people who trade GLD options. Unlike options, the futures market is open 23 hours a day, starting Sunday evening to Friday evening. Seeing how it moves overnight when the market is closed can help you get a leg up on how GLD will trade when the CBOE and NYSE Arca open up for options.

jasperCrow

Imagine slamming the CBOE with a billion contracts in one click 💀

Impressive-Bee-5183

Congrats on reaching that point. Here's what the data actually shows about making a living selling options: I've researched this extensively because I considered the same path. The reality is both more promising and more dangerous than most realize. The Good News (The Edge is Real) The statistical advantage for option sellers absolutely exists: * 60-80% win rates are consistently documented across academic studies * CBOE PutWrite Index: 10.32% annual returns from 1986-2018 vs 8.77% for S&P 500, with 36% less volatility * Options Industry Council 15-year study: sellers averaged 8.27% annual returns while buyers lost 5.39% * Implied volatility exceeds realized volatility 85% of the time (AQR Capital research) * 2024 Boston College study of 2.4M retail trades: naked option selling earned 20% average returns So yes, the math works. The volatility risk premium is real and harvestable. The Brutal Reality (Why Most Fail) Here's where it gets darker: Capital Requirements Are Massive To generate $5,000/month income reliably: * Covered calls/cash-secured puts: $200,000-$300,000 (2-3% monthly target) * Credit spreads: $50,000-$100,000 (more capital efficient but active) * Iron condors: $75,000-$150,000 (10-20% on deployed capital) * PLUS you need 30-40% extra cash reserves for volatility spikes Below $50k account size, this strategy is barely viable due to position sizing constraints and fee drag. The Catastrophic Failure List * James Cordier (OptionSellers.com, 2018): $150M fund blown up in 2 weeks. Clients lost 100% + owed more. Natural gas spike, naked calls, 20-40x overleveraged * Karen "Supertrader" (2016): $136M fund, $57M unrealized losses hidden through rolling scheme. SEC fraud charges, $1.5M fine, permanent ban * 1987 Black Monday: Harry Fluke lost life savings + owed $513,000 from selling "safe" naked puts for $500 premiums. Professional trader lost $52M in one day * March 2020: Countless traders reported "losing double what the market lost" as VIX hit 82.69 The quote "picking up pennies in front of a steamroller" exists for a reason. What Separates Survivors from Casualties Position Sizing is Everything * 2-5% risk per trade maximum (Cordier had 20-40x this) * Use only 25-30% of available buying power (NOT 70-80%) * Multiple uncorrelated positions, never concentrated Defined Risk is Non-Negotiable for Retail * Credit spreads and iron condors survived March 2020 with 20% drawdowns * Naked options/strangles wiped accounts via margin calls * Yes, you collect less premium. But you survive Professional Risk Management * Enter at 45 DTE (optimal theta) * Close at 50% max profit (dramatically improves win rates) * Exit at 21 DTE regardless (avoid gamma risk) * Stop loss at 200% of credit for undefined risk * Portfolio margin only if you have 2-3x minimum requirements in reserves Early Retirement Now survived both Oct 2018 and March 2020 crashes using these rules. The OptionSellers clients using similar strikes but without proper sizing/risk management lost everything. The Tax and Time Reality Check Tax Treatment Destroys Returns * Short-term options = ordinary income rates (up to 37%) * 12% gross return → 8.16% after-tax at 32% bracket * SPX/NDX/RUT options get 60/40 treatment (max 28% rate) - substantially better * Stock options + wash sale rules = tax nightmare for active rollers This Isn't Passive Income * Covered calls: 20-30 min weekly * Iron condors/strangles: 30-60 min daily + hours during volatility * Learning curve: 100+ hours before you're competent * Compare to dividend stocks: 5-10 min quarterly Realistic Net Returns * Conservative defined-risk: 8-12% gross → 5-8% after-tax (high bracket) * With 2x portfolio margin: 16-24% gross → 11-16% after-tax * Expected drawdowns: 15-25% during crises * One bad volatility regime can erase years of gains How It Compares to Alternatives Dividend Stocks * 2-4% yield + appreciation * 0-20% tax rates (qualified dividends) * Truly passive (5 min quarterly) * Full upside participation * Lower income but WAY simpler Options Income ETFs (JEPI, JEPQ) * 8% distribution yield * Professional management, no blow-up risk * BUT: 2023 returned 9.9% vs 26.3% for S&P 500 * You cap upside permanently for that income My Honest Assessment You can make a living selling options IF: * ✅ You have $100k+ dedicated capital (preferably $200k+) * ✅ You use ONLY defined-risk strategies as retail trader * ✅ You never exceed 2-5% risk per trade, 25-30% portfolio exposure * ✅ You can psychologically handle 20-30% drawdowns without abandoning strategy * ✅ You have 30-60 min daily during market hours * ✅ You understand this is active income, not passive You will likely blow up IF: * ❌ You sell naked options with <$100k account * ❌ You use >50% buying power regularly * ❌ You increase position size after winning streaks * ❌ You sell options based on "market view" rather than mechanical rules * ❌ You lack 2x margin requirements in cash reserves The Professional Verdict Academic research is clear: Both retail and institutional investors profit most from selling volatility, but retail traders using simple strategies systematically lose money. The difference is capital, discipline, and risk management. Warren Buffett's successful 2009 option selling (puts on S&P at 450 strike during crisis) shows what it requires: $100B+ balance sheet making margin calls impossible, 50+ years experience, contrarian timing during panic, and ability to hold regardless of mark-to-market. Retail traders have none of these. The CBOE PutWrite Index proves 30+ year viability, but recent 2024 CAIA research warns "option selling has become consensus" with oversupply degrading future returns. Covered call strategies targeting high yields (12%+) LOST money 2011-2023 despite the bull market. Questions to Ask Yourself 1. Can you watch a $50k account become $35k in 3 weeks without panic-selling? 2. Do you have enough capital that a 30% drawdown doesn't threaten your lifestyle? 3. Can you follow mechanical rules when your gut screams to deviate? 4. Are you okay earning 8-12% with constant stress vs 10% buying index funds? If you answered yes to all four, you might be in the 5% who can do this successfully long-term. Congrats again on your success so far. Just make sure you've stress-tested your approach against a VIX spike to 40+, because that's when you'll find out if your risk management is adequate or if you're just lucky. The graveyard of blown-up option sellers is 20x larger than the roster of people who've done this successfully for 10+ years. Respect the steamroller.

Careless_Light_2931

CBOE Market Volatility Index , it went down over -10% on Friday, gives you 85% chance of a red day the next trading session or the next day after that

dimethylhyperspace

Calls are sold by CBOE, as they are the middleman between all option transactions. People think for every buyer there is an equivalent, retail seller. That's not true. The mm's sell the options, and if they are imbalanced on calls vs puts, in either direction, they hedge by buying shares or shorting shares. This is the basic concept between gamma exposure in the market. When I see giant buys like that on irregular strikes, I usually interpret is as a hedging position on a much larger stock position.

Impressive-Bee-5183

Alright, let me be brutally honest with you because I've watched too many people learn this lesson the expensive way. Your Sample Size is a Joke September 9 to October 17, 2025? That's maybe 27 trading days. You're basically saying "I tested my parachute by jumping off my couch 27 times and it worked great!" You know what didn't happen in your testing period? * Federal Reserve surprise rate decisions * Major bank failures (like SVB in March 2023) * VIX spikes above 35 * Flash crashes (August 2024's Japan carry trade unwind hit 6% intraday) * Earnings surprises from mega-cap stocks that move SPY 2%+ * Geopolitical shocks (remember when COVID first hit and SPY had multiple 5-10% days?) Your backtest caught the market equivalent of "sunny with light clouds" weather. Cool. Now what happens during the hurricane? The Math is Hilariously Bad Let me break down what you're actually doing here: "both wings together cost only 10% of the Premium that we collected" So you collect $2.78 in premium, spend $0.28 on protection. That means: * Maximum gain: ~$2.50 per contract (minus $6 fees = $2.44) * Maximum loss: Depends on wing spacing, but looking at your purple lines, it's probably $15-50+ per contract You're risking 20-30x your maximum gain. This is literally the definition of a negative expectancy trade. You need to win 95%+ of the time just to break even over the long run. And spoiler alert: you won't win 95% of the time when volatility comes knocking. Look at your own equity curve - you're grinding out $50-150/day profits, but those purple max-loss lines show potential $1,000+ losses. One bad day wipes out 2-3 weeks of gains. Why This Strategy Has a 100% Historical Failure Rate This isn't theoretical - this EXACT strategy (short vol, collect premium, minimal protection) has destroyed countless traders and funds: OptionSellers.com (2018): Professional fund that sold options. Lost clients $150 million in a single November day when natural gas spiked. Guy had to release a crying YouTube video apologizing. LJM Preservation and Growth Fund (Feb 2018): Down 82% in THREE DAYS during the Volmageddon event. $1+ billion fund, gone. XIV ETF (Feb 2018): Short volatility ETF, lost 90%+ overnight and was liquidated. People had their entire retirement accounts in it. The pattern is ALWAYS the same: 1. Make steady profits for months (just like your backtest) 2. Get confident, increase position size 3. Volatility event hits (happens 1-3 times per year) 4. Lose 6-12 months of profits in a single day 5. Either blow up completely or quit The Real-World Execution Problems 1. Bid-Ask Spreads Explode During Volatility Your backtest probably uses mid-prices or last-traded prices from Yahoo Finance. In reality: * Calm market: SPY 0DTE spreads might be $0.05-0.10 per leg * Volatile market: Spreads widen to $0.25-0.75 per leg When you need to exit a losing position at 3:45pm because SPY just dropped 1.5%, you're paying the ASK to close your shorts and hitting the BID to sell your longs. That's $1-3 per contract in slippage across all four legs. On a $2.78 credit, you just lost 40-100% of your profit to slippage. Your backtest doesn't account for this. 2. You Can't Exit When You Actually Need To At 3:55pm on a volatile day, try getting filled on a 4-leg iron butterfly at reasonable prices. Market makers KNOW you're desperate. They'll quote you garbage. Your options: * Eat massive slippage (50%+ of your credit) * Let it expire and pray SPY doesn't land near your strikes (pin risk) * Get assigned and wake up Monday with positions you didn't want 3. Yahoo Finance Data is Garbage for This "This Data is collected via Yahoo Finance" Yeah, no. Yahoo Finance options data is notoriously bad because: * 15-minute delay means stale prices * Shows last traded price, not real-time bid/ask * Doesn't capture the actual order book depth * Many strikes have zero volume and stale data The reason CBOE DataShop costs $2,000 is because it's REAL exchange data with actual quotes. Your backtest is like planning a road trip using a map from 1995. 4. Pin Risk Will Destroy You You're trading 0DTE that expires at 4:00pm. If SPY closes anywhere near your short strikes (within $0.50), you have massive pin risk: * SPY closes at $580.05, your short call is $580 * You get assigned on the call (now short 100 shares) * Your $582 long call expires worthless * Monday morning SPY gaps up to $582 * You just lost $200 per contract overnight This happens ALL THE TIME with 0DTE and it's not in your backtest. 5. Margin Calls at the Worst Possible Moment At 3:45pm, SPY drops 1%. Your position shows a $2,000 unrealized loss. Interactive Brokers sees you're under margin requirements and force liquidates your position at market prices when spreads are widest. You don't get a choice. You don't get to "wait it out." They close you out at the worst possible prices, locking in your loss. This is literally in IB's margin policies - they can liquidate without notice. What Your First Real Month Would Look Like Days 1-8: "Holy shit! I'm making $100-150/day! This is amazing!"Total: +$1,000 Day 9: Small loss, SPY moved 0.8% in last hour. Close at -$350.Total: +$650 Days 10-15: Back to winning. Confidence restored.Total: +$1,500 Day 16: CPI data comes in hot. SPY drops 1.5% in 30 minutes at 2:00pm. You try to close but spreads are 5x wider than normal. You panic. Close for -$1,800.Total: -$300 Days 17-20: Reduce size, scared. Make tiny gains.Total: +$100 Day 21: FOMC announcement. SPY volatility explodes. Your shorts go deep ITM. Margin call. IB liquidates you at terrible prices.Final loss: -$2,500 Account blown by 25% in less than a month. The Statistical Reality Check You need to backtest through these periods (at minimum): * March 2020: COVID crash, SPY moved 5-10% daily * February 2018: Volmageddon, VIX 15→50 overnight * August 2024: Japan carry trade unwind, SPY dropped 3% in minutes * March 2023: SVB banking crisis, massive intraday swings * All of 2022: Constant 2-3% daily moves in bear market I guarantee your strategy would have multiple -50% to -100% drawdowns in those periods. Not because the strategy is bad in theory, but because the risk/reward is fundamentally broken. The Warning Signs You're Ignoring Your own equity curve is screaming the problem at you: * Small consistent gains: ✓ (classic premium selling) * Occasional larger losses: ✓ (classic blow-up pattern forming) * Maximum loss WAY bigger than maximum gain: ✓ (terrible risk/reward) * Short time period: ✓ (haven't seen a real volatility event) This is textbook "works until it doesn't" strategy. What You Should Actually Do If you're dead-set on doing this: 1. Backtest 2020-2025 minimum 2. Paper trade for 3 months - Not backtest, LIVE paper trading to feel real execution 3. Risk max 1-2% per trade - If your account is $10K, risk $100-200 max 4. Skip high VIX days - If VIX > 20, don't trade that day 5. Have mechanical stop loss - Close at -3x max gain, no exceptions 6. Don't trade around events - No trading on FOMC, CPI, NFP days But honestly? Just don't do this. The math doesn't work. You're picking up pennies in front of a steamroller. The Bottom Line Truth Your backtest shows this works when: * Markets are calm ✓ * Volatility is low ✓ * No major news events ✓ * SPY moves less than 1% ✓ Cool story. What happens when any of those conditions change? Because they WILL change. Regularly. The question isn't "can I make money in calm markets?" It's "what happens when the market isn't calm?" Answer: You lose 10-20 days of gains in one trade. Then it happens again a month later. Then you quit with a blown account. I'm not trying to be harsh - I'm trying to save you money. This strategy has a 100% failure rate over long enough time horizons. It's not if you blow up, it's when. If you have $10K and you're willing to lose $3-5K learning this lesson the hard way, go ahead. But don't say nobody warned you when you lose 6 months of profits in a single Thursday afternoon because Powell said something unexpected. The graveyard of retail traders is paved with profitable short-vol backtests. Good luck, you're gonna need it.

Dumbest-Questions

> The CBOE’s official public feeds do not label trades by participant type (customer, dealer, market maker, or institutional). FYI, there are some relevant tags in the OPRA feed. Also, CBOE does offer a "near-real-time" dataset that provides very detailed tagging of electronic flow (outside of COB prints and voice trades).

Impressive-Bee-5183

Oh man, I've seen this movie before and it doesn't end well. But let me give you the brutal honest truth since you're asking for realism. ## The Elephant in the Room: Your Sample Size is Basically Nothing You tested from **September 9 to October 17, 2025**. That's like 25-30 trading days, maybe? Dude. That's not a backtest. That's a *vibe check*. You need to see this strategy through: - Major Fed announcements (FOMC, CPI, NFP) - [VIX spikes above 30-40](https://www.cnbc.com/quotes/.VIX) - Flash crashes (like August 2024's Japan carry trade unwind) - Circuit breaker days - Election results - Bank failures - Random Trump tweets that move markets 5% **Your timeframe literally caught none of these.** You backtested during what looks like a relatively calm period. That's survivorship bias on steroids. ## The Math That Will Kill You Let's talk about your risk/reward here: > "both wings together cost only 10% of the Premium that we collected" So you're collecting $2.78 in premium and spending $0.28 on protection. That means: - **Max gain per trade:** ~$2.50 (after fees) - **Max loss per trade:** Could be $20-50+ depending on strike spacing You're risking **10-20x your max gain** on EVERY trade. This is the textbook definition of "picking up pennies in front of a steamroller." Look at your equity curve - you're making $50-150 per day but your purple max loss lines show you could lose $1,000+ in a single bad day. **One bad day wipes out 10-20 good days.** ## Real World Issues ChatGPT Missed **1. Pin Risk is Your Worst Enemy** You're trading 0DTE options that expire at 4pm. If SPY closes near your short strikes (say within $0.50), you have **massive pin risk**. You might get assigned on one leg but not the other, leaving you with a huge overnight position you didn't want. Example: SPY closes at $580.05, your short call is at $580. You might get assigned on the call (now short 100 shares per contract) but your long call at $582 expires worthless. You're now naked short shares overnight. If SPY gaps up Monday morning, you're fucked. **2. Bid-Ask Spreads During Volatility** Your backtest uses historical mid prices. In reality: - Normal market: 0.05-0.10 spread per leg = $0.20-0.40 slippage per butterfly - Volatile market: 0.20-0.50 spread per leg = $0.80-2.00 slippage per butterfly When you need to exit a losing trade fast, you're paying the ask on your shorts (to close) and selling at the bid on your longs. **That slippage could eat 30-50% of your premium collected.** **3. You Can't Always Exit When You Want** At 3:58pm on a fast-moving day, good luck getting filled on all four legs at reasonable prices. The market makers KNOW you're desperate to close and they'll quote you garbage prices. You might have to: - Eat massive slippage - Let it expire and pray - Get assigned and deal with the consequences Monday **4. The Real Fee Structure** You said $1.50 per contract on Interactive Brokers. But there's more: - Regulatory fees (exchange fees, OCC fees, SEC fees) - Assignment fees if you get exercised - Margin interest if you get assigned and hold overnight Real all-in cost is probably closer to $2-3 per contract, so $8-12 per butterfly. That cuts your small winners even smaller. **5. Margin Calls Will Liquidate You at the Worst Time** Let's say SPY drops hard at 3:45pm. Your account shows a big unrealized loss. Interactive Brokers sees this and says "your margin is insufficient" and **forcibly closes your position at market prices** right when spreads are widest. You don't get a choice. This happens ALL THE TIME with 0DTE traders. You get margin-called out of positions at the worst possible moment. ## The Historical Precedent: This Strategy ALWAYS Blows Up Eventually Go look up: - **OptionSellers.com** (blew up in 2018, lost clients $150M) - **LJM Preservation and Growth Fund** (down 82% in February 2018) - **Rogue Wave Capital** (similar short vol strategy, destroyed) These were professional funds with PhDs and millions in capital. They all ran variations of "sell options, collect premium, it's free money!" **They all blew up.** The pattern is always the same: 1. Make consistent small gains for months/years 2. Get overconfident, increase position size 3. Black swan event hits 4. Lose 50-100% of capital in one or two days 5. Fund closes, lawsuits begin ## What Would Actually Happen in Your First Month of Live Trading **Week 1-2:** "Holy shit this is working! I'm making $100-200/day!" **Week 3:** Small loss day, -$300. "That's fine, still up overall." **Week 4:** Another small loss, -$250. "Variance is normal." **Week 5:** CPI comes in hot. SPY drops 2% in 30 minutes. Your shorts are now deep ITM. You try to close but spreads are 10x wider than your backtest assumed. You close for -$2,000. **You just gave back 3 weeks of gains in one trade.** **Week 6:** You reduce size, scared. Make smaller gains. Confidence slowly returns. **Week 8:** Fed announcement. SPY moves 3% in the last hour. You can't exit fast enough. Margin call. IB liquidates you. **Final loss: -$5,000 on a $10,000 account.** ## The Data Quality Issue You're Ignoring > "This Data is collected via Yahoo Finance" Yahoo Finance options data is notoriously bad for backtesting because: - It shows the last traded price, not real-time bid/ask - It doesn't show the actual quotes available when you'd need to trade - It doesn't capture the bid-ask spread widening during volatility - Many strikes have stale prices or no trading volume [CBOE DataShop](https://datashop.cboe.com/) costs $2K for a reason - it's the actual exchange data showing real quotes. Your backtest is built on data that doesn't reflect what you'd actually face in live trading. ## The One-Month Timeframe is Laughable You need to test this through: - The COVID crash (March 2020) - SPY moved 10% daily - The Volmageddon event (February 2018) - VIX went from 15 to 50 overnight - The August 2024 Japan unwind - SPY gapped down 3% in minutes - The SVB banking crisis (March 2023) - The 2022 bear market with constant 2-3% daily swings **I guarantee your strategy would have blown up the account in ANY of those events.** Go get free data from somewhere and backtest 2020-2025. I bet you'll see your equity curve has multiple -80% to -100% drawdowns. ## What You Should Actually Do If you REALLY want to trade 0DTE: 1. **Test on 5+ years of data minimum** 2. **Paper trade for 3 months first** (not just backtest, actual live paper trading to feel the executions) 3. **Size tiny** - risk only 1-2% of account per trade, MAX 4. **Have hard stop losses** - close at -3x your max gain, no exceptions 5. **Skip high-volatility days** - if VIX > 20, don't trade 6. **Don't trade around major announcements** (FOMC, CPI, etc.) 7. **Have an exit plan BEFORE entry** - know exactly when you'll close But honestly? **This strategy is a ticking time bomb.** The math is against you. You're selling insurance with terrible risk/reward. Eventually, the crash comes, and it wipes you out. ## The Bottom Line Your backtest shows this works in calm markets. Cool. Everyone knows that. The question isn't "does this work when markets are calm?" It's **"what happens when markets aren't calm?"** And the answer is: you lose big, fast, and without warning. If you have $10K to trade with and you're okay losing $5K+ in a single day for a chance at making $100/day, then go for it. But don't say nobody warned you. The graveyard of retail traders is filled with people who had profitable 0DTE backtests. **TL;DR: Your backtest timeframe is way too short, you're not accounting for tail risk, the risk/reward is terrible (risking $1000 to make $100), and this strategy has a 100% historical failure rate over long enough timeframes. It WILL blow up your account eventually.** Anyone else here blown up an account on short premium strategies? I'd love to hear war stories.

mollylovelyxx

Can you even get this accurately? I've seen tools that claim to show this but don't you need to know if each order is being done by a customer or a dealer etc? And as far as I know, no feed tells you that (only CBOE itself I presume would know, but public feeds don't give you that access)

EvolvingDior

CBOE supports stop loss orders. Your broker should as well.

Kirko_Cousins

CBOE Put/call is 0.83 SPY is a little over 1 Monday opens 670

HardradaTheKing

I buy some more CBOE en CME in between every next ratecut

HardradaTheKing

You could swap these stocks for steady compounders that pay dividends. Buy some CBOE to hedge against a high volatility market, and enjoy the free money that comes into your pocket to spend on fun stuff.

greytoc

CBOE Rule 390 maybe? Or if you trading AM options - there was a change in September - [https://www.cboe.com/notices/content/?id=55365](https://www.cboe.com/notices/content/?id=55365)

Tiaan

Robinhood listing is great but it doesn't solve the root issues of custody, volume and liquidity. GLASF is still traded OTC and is on the CBOE Canadian exchange instead of a major US uplisted exchange such as the NASDAQ or NYSE. Being available on another big brokerage like Robinhood is great, but it's not any different than buying GLASF on fidelity or schwab OTC which US customers were already able to do. We need these stocks to be traded on the NYSE or NASDAQ to see TLRY-level volumes and trading activity

Happy_Discussion_536

Every time I see someone from CBOE or some other casino I automatically assume everything they're about to say is verbal diarrhea to get degens to gamble. It never fails. Just saw a dude suggest buying buying puts on mag stocks and selling puts on SPY as a reversion trade suggestion. Fucking snake. Mag is what's going to do well.

Consistent_Panda5891

CME stock has 2.5% dividend with a compounded more growth on for me more safe than an index. After all if there is crash index would tank more than that. CBOE also beats index. I would recommend you to have that when volatility is high. Individual companies is good (Rolls Royce, droneshield, mitsubishi heavy industries... more recently rare earth boom... Just need to watch news and you can easily get in train early before a high boom). There are others cyclical or opportunity, such as FNMA, US green stuff, also might be good Investments.

NefariousnessNo9643

NEW GUYS ----> Najarian brothers books. They wrote 2, if on budget get at least the newest one. Easy to understand and while they dumb it down for cnbc crowd on tv, the books themselves cover important territory. Andrew Keenes book is good too for newbs. Whatever happen to that guy anayways. I liked his energy in chicago pits You can also do all courses on OIC, CBOE, and OCC. Google search it, i watched all the videos and passed all the exams/quizzes yrs ago. Pretty sure it was all free. Do the very good courses free at TASTY trade learning center. Do both beginners & advanced. I highly recommend this. Overby - option playbook. 90% visuals and payoff diags but damn he crushed this book. I feel like this is a must own. Get hardcover Option alpha - free videos and courses IBKR campus - go to traders academy courses - free videos and quizzes Bloomberg market concepts - its a low cost course/ it has a decent section on options. If i ran a capital markets 101 class, I would make all freshmen do this before day 1. Just FYI Sang lucci - he was more active back in the day and his old you tube videos from 2013-15 on order flow sweeps and ATM weeklies on fangs are fun as heck to watch. I like his focus on tape and bc he was trained as a prop trader, he has good fun read on mkt microstructure. Think or swim/TDAM - free videos, covers need to knows @ learning center CME institute - free "all about options" course @ their learn center MID LEVEL ----> Spina/Sosnoff - tom a goat and chicago legend; concise book and zero fluff Mcmillan - get 5th edition of strategic investments. Consensus bible and weighs more than a cinderblock Natenberg - perennial favorite Hull - goat but dense ADVANCED/OTHER ANGLES ----> Mcmillan on options The option edge - very academic, but has its moments where it really loops in everyday stuff, like market makers and why Berkshire sells OTM puts. Content good - problem is they printed only paperback size 5 font so its basically unreadable without a magnifying glass. Podcasts - ally options playbook is the best (apple, spotify) Colin bennett - trading volatility / cool stuff in here that is not found elsewhere Jeff augen - he wrote 3 gems, all on amazon Trading option greeks - dan parsanelli. Well-scoped book How to Calculate option prices and their greeks - Ursone Intrinsic - mike yuen. Entire book about leaps on tech names during a bull cycle. For practical purposes, ch 5-10 are good and in plain language cover his actual trades; those looking for an actual trader perspective might enjoy this. Intelligent option investor - takes a value investor approach, covers lot of ground/key concepts Taleb - dynamic hedging - hard to find book / deep practical philosophical. This dude is smart!! Sinclair - he has 3 books i have yet to read BEAST MODE/FINAL THOUGHTS --> regarding exams...consider the CFA FRM CMT CFP CAIA CIPM CTP exams. All levels of all these exams touch the subject in some form or another. The first 2 treat it far more rigorously. CTP way too light a treatment, unfortunately. CMT focuses lot on vix. CFP covered the meat and potatoes better than i expected. Should you want the journal entries for how companies book stock comp/option awards, becker CPA far books really cover the must-knows. Pursue MBA - most top programs default to hull in the derivatives class & authors that both the FRM/CFA base their actual exams on. Adding this in case someone is looking at bschool/MSF down the road. Lastly, if looking for a gift idea or curious what it was like on the floor years ago, "trading pit hand signals" by carlson is one sweet as fk coffee-table book. Its true, the traders have seperate gestures for straddles and strangles. Best of luck! **quick update 4Q24 -** I realized CBOE has a free option calculator, it can be very useful during earnings season to adj theoretical price with different IV assumptions. OIC has one too. but i like the cboe one's simplicity - just an FYI!

Creative-System-2768

So are my CBOE calls.

Fishherr

Haha what do you want me to DM you? Watch the price of BTC when CBOE options go live Nov10-11 😂. Think you’re gonna see what I mean

Brawmethius

https://optioncharts.io/options/SPY/open-interest?option_type=all&expiration_dates=2025-10-08:w&chart_type=line&strike_range=all Uhh back to the top of gamma ramp. Yet another day market lead by options. SEC in the 80s "we approve options for CBOE but we must be wary about self leading derivatives, due to it being less than 5% of volume we are not worried today but should remain vigilant." SEC today "lmao fuck it new derivative offering APROVED"

Brawmethius

Here you go, today is a positive gamma ramp. https://optioncharts.io/options/SPY/open-interest?option_type=all&expiration_dates=2025-10-08:w&chart_type=line&strike_range=all Same same, otherside. This is why the Market is tylenol extra strength artistic. Derivative market is now bigger and leading the underlying market. SEC was very concerned about this mechanism when first approving options for CBOE, but volume was <5%. They theorized this could happen but concluded that at this time risk was low and should be monitored. Now sec sees upwards of 50% volume and is like lmao cool let's just approve more offerings. Wild world

LittleBoy1954

"... any of you are trading options / stocks full time." Yes. Options. Index options (SPX) to be exact. Every trading day, all day. I do that through my S-Corp. I knew it was the right time "to do it" when my employer said to me, "Captain you'll be 60 next year and, OBTW, FAA rules don't let airline pilots fly commercially after age 60" (now 65.) I knew it was coming but it was all too soon. Started options trading in the early 1990s, but got very interested in them soon after the CBOE first introduced them in 1973. It has provided a very nice source of income. Anyone can do it IMHO.

Micronto65bymay

Bearhunter is an agent from CBOE trying to shake my calls loose. Not this time, good sir.

Arcite1

Market makers don't create strikes, the exchanges do. It's based on demand. This does not appear to be a heavily-optioned stock (stocks with high options volume tend to have weeklies, which this doesn't) so there isn't much demand. Financial firms like brokerages can request that the exchanges create new strikes. (Interestingly, the CBOE used to accept requests directly from retail traders, but they stopped doing so. Now you'd have to ask your brokerage to make a request.)

GunnerSkaleHD

If you want cheap options representing spx you can trade the XSP index on CBOE. Its a 10th of the real SPX

Bostradomous

When they told me they only use CBOE was before they were acquired, it’s possible things have changed since then.

ChuchoFromDorne

It's all about listings and liquidity. If they can build a brand and attract new listings and keep market makers highly subsidized, then they can put a dent. NYSE, NASDAQ, and CBOE are the top three equities exchanges by volume, MEMX AND IEX are chipping away share but are still lagging. TSX has poached talent from BATS/CBOE and they are serious on listings. Equities business is a challenging one, and there isn't much room for innovation, so the real differentiator is purely based on pricing. If they have deep pockets, then they can make something out of it.

Bostradomous

Dude, call tastyworks and ask them what exchange they use. They will tell you flat out CBOE, and you can’t route your orders to any other exchange through them. Then call Schwab and ask the same question. Or open tasty’s platform and send an order. You cannot choose which exchange it’s routed to. Schwab - you can choose the exchange. Thing is, we know for a fact Schwab routes to multiple exchanges, and yet none of them are listed on the 606 disclosure. I know for a fact what tastyworks told me. Something doesn’t add up. We’re missing something, because even though a 606 is supposed to list the exchanges used, the 606 for Schwab doesn’t list ARCA, CBOE, etc, even though we know orders can be routed to any of those exchanges.

Terrigible

>That’s PFOF you dunce. Not a single exchange is listed on that document 🤦‍♂️ Exactly, which is how Tastytrade routes their orders. Go read up on what a 606 report is. >CBOE, NYSE, ARCA, PHLX - those are exchanges you regard. I know. And I can list all of them: * BOX Exchange LLC * Cboe Exchange, Inc. * Cboe BZX Options Exchange * Cboe C2 Exchange, Inc. * Cboe EDGX Options Exchange * MEMX LLC * MIAX Options Exchange * MIAX Emerald, LLC * MIAX PEARL, LLC * MIAX SAPPHIRE, LLC * Nasdaq BX Options * Nasdaq GEMX * Nasdaq ISE * Nasdaq MRX * Nasdaq Options Market * Nasdaq PHLX LLC * NYSE American Options * NYSE Arca Options > You just shared a doc that lists all the hedge funds that front run your orders 😂 Tastytrade's orders*

Bostradomous

Yea I was with tasty basically until they were bought out and then went back to Schwab. I know their arrangement with CBOE predates when they were acquired. I don’t know what changes have happened since then

Empty_Trust_8098

You actually can find many good free options data depending upon what you need. Barchart and Yahoo Finance give you IV, chains, and some history for free, and CBOE gives you official options numbers and educational content. For a different angle, companies like Techsalerator go beyond retail-level platforms by offering large global financial and firmographic datasets. This can be really useful if you’re trying to combine market activity with deeper insights on the businesses behind the tickers.