The 0DTE Options Handbook
Profit from Zero-Days-to-Expiration Options in Any Market Condition
The book "The 0DTE Options Handbook: Profit from Zero-Days-to-Expiration Options in Any Market Condition" is now available in both ebook and paperback formats on Amazon worldwide. Kindle Unlimited subscriber can read the book for free.
This book is a summary of my insights and experience from thirty years of investing. A good investment strategy should be based on statistical advantages, measurable outcomes, consistent performance, scalability and high liquidity. The advent of 0DTE options brings new opportunities and challenges for investors. If you invest in finance, you must have traded the S&P 500 Index ETF (SPY), the Nasdaq 100 Index ETF (QQQ) or their constituents. This book analyzes in detail the historical performance of SPY and QQQ over the past 30 years, and discusses three common methods to improve their returns: dollar-cost averaging (DCA), dividend reinvestment plan (DRIP) and selling covered call options. Using SPY's historical data, we show a simple 0DTE option strategy: selling covered call options with expiration date on the same day. The performance in one year is much better than SPY: lower volatility and significant excess returns.
In addition, our analysis found that SPY's intraday volatility is limited by the volatility index, its range is narrow, suitable for neutral or slightly directional trading. The introduction of 0DTE options allows traders to establish market-neutral trades, such as iron condor strategies with a probability of profit over 50%, as long as they are properly set up and timely adjusted, they can profit with high probability. We achieved a generous return in 2022 using this strategy, surpassing the S&P 500 index by 102%. Risk management is the key to success. I demonstrate in this book how to maintain neutrality and hedge against black swan events or even profit from them. This book is the first to explore these most active securities, namely SPX, SPY, QQQ and NDX and their most popular 0DTE options. You don't have to spend years mastering options trading. I will teach you some basic principles and simple steps to make it easy for you to learn.
This book is a manifestation of the four pillars of modern finance in practical application: the semi-strong form of the efficient market hypothesis (EMH, Nobel Prize in 1970), modern portfolio theory (MPT, Nobel Prize in 1990), the Black-Scholes option pricing model (BSOPM, Nobel Prize in 1997) and the Kelly criterion.