Hey all. I'm trying to make roughly $200/day using vertical put spreads on SPY and have been targeting a 10 cent spread with about 25 contracts.
What I don't like is that the fees for SPY are about 22% of my profit, and that there's potential for assignment if the short leg goes ITM.
I know that SPX is cash settled and has lower fees but I'm not sure if the volatility in the options pricing would be slow enough for me to manage given how wild today was.
Is XSP the better fund to trade with for this purpose? I think the only downside to XSP is lower liquidity but I'm not sure hpw that would affect me. I try to close my positions at .01 spread value.
SPX vs XSP vs SPY for 0DTE vertical put spreads
byu/bbmiscOG inoptions
Posted by bbmiscOG
3 Comments
If you don’t understand these simple concepts you absolutely should not be trading like this yet.
Also, you think you will make $200 a day, but did you factor in the inevitable five figure drawdown?
Give as an example of your SPY put spread. for tomorrow 4/22.
You are correct XSP and SPX are cash settled, but since you are doing 0 Dte that is a non issue, just close BEFORE THE CLOSE. If you have the loss you have to pay up. You might get hit with a nickel extra on the Spy , but either way it is a loss.
I have never seen Xsp to be a good trading instrument, so stay with Spx. What is a 10 cent spread. Maybe slow down and try 1 or 2 contracts. Actually Tasty does an IC on Spx about 3 out of 5 mornings looking to make 60-100 within an hour or two.
If you get an unfunded account at Tasty you could pull up these trades , most Sell the 20 delta on either side, and then go for 1k-2k wide. You might be able to pull up the show where they enter the trades, but once you see one you have seen them all.
[https://app.screencast.com/UcDz9ieLgjMfW](https://app.screencast.com/UcDz9ieLgjMfW)
[https://app.screencast.com/dj4t7Pnh16XHD](https://app.screencast.com/dj4t7Pnh16XHD)