Day 107

And another week with a big move! Up!

Market Recap

SPY gained over 4.5% and QQQ gained over 6%.

SPY is at ~$710, and QQQ is on ~$648.

VIX is around ~17 now.

Trading Update

I closed positions in the following:

• HOOD
• NVDA
• PLTR
• RDDT
• SLV
• SPX

I was thinking the rally will fade, and in line with that speculation, I had sold calls on NVDA and RDDT. But it turned out that the market kept ripping higher, including both NVDA and RDDT breaching their expected moves. I closed both short calls at a loss.

I then adjusted my tactics to make more short term bullish trades. And got rewarded well enough to not only wipe out my losses in the NVDA and RDDT trades, but also turn my entire year to date profitable.

After my losses on short calls, I speculated there was no stopping the bullish run - at least for the week. I wanted to put my money on this theory.

First up was PLTR. Last week, I wrote about opening a Jade Lizard on PLTR. However, like I said above, the market actually was more bullish than I anticipated, so I resisted shorting the Call side, but still closed a bullish Put on PLTR for a $170 profit.

And now let's look at my most interesting trade sequence of the week (all times are Pacific Time).

I had a psychological scar from a couple of weeks ago when I had lost $1260 in 15 minutes trading Zero DTE SPX (see my trading update here for that week). But my desire to trade SPX this week was pretty strong considering the bullish momentum of the overall market.

However, instead of going to Zero-DTE straightaway, I first tried to test the waters with a One-DTE. I placed an order for a $20-wide Put Credit Spread at 12:59 PM on Wednesday, 4/16, in the very last minute of the trading day, speculating that if the bullish run continues - even a small pop at the open on next day would give me a quick win. Of course, there was still an overnight risk, but I had placed the order just slightly out of the expected move range and so was optimistic I wouldn't lose the full amount. I received $2.05 in premium credit.

Next morning on Thursday, my theory held true, market popped higher at open, and I was out of the trade even before the first full minute of trading day was over, closing the spread at 80¢ at 6:30 AM, netting $1.25 in profits. Net: +$125 for $2000 in risk.

Since the market popped up and kept going up, I was regretting getting out so early, so I went right back in to squeeze a tiny bit more, at a smaller risk though. I placed a $10-wide Zero-DTE Put Credit Spread now at 7:15 AM, getting $1.20 in credit, and got out at 8:37 AM buying back at 30¢, another 90¢ of profit. Net: +90$ for $1000 in risk.

I was itching for Friday markets to open. At 6:39 AM, i.e, within 10-minutes of market open, I had seen enough to be convinced enough to bet directionally again. I placed a $20-wide Put Credit Spread outside of 1-Standard Deviation at that moment, getting $3.10 in premium. I was thinking to run it all the way to end of day to keep the full $3.10, but I had realized over 80% in premium in 2-hours so I bought it back at 40¢ and closed the trade at 8:37 AM. Net: +270$ for $2000 in risk.

In total, I made $485 this week on SPX - risking under $2000 overall. That's 24% in a single week, or 1261% annualized! Of course, one, this is not sustainable for 52 weeks straight, and two, I would never bet more than $2000 or $3000 on these trades to get a larger profit by increasing the capital at risk. Regardless - I find SPX fantastic to trade for Spreads and Iron Condors, and extremely exhilarating when trading Zero DTEs.

Here are the actual trades.

Here is the entire Year to Date list - I added previous week's list here for comparison.

As you may notice, the net amount now is no longer red, I am $160 ahead for the year. We still have a long way to go in the year though, so I am not ready to declare victory just yet.

Trade Ideas I am Thinking of For Next Week

I still think market is neutral to bullish and there might be an opportunity to bet more money on directional SPX trades next week.

They will continue to be either Put Credit Spreads or slightly bullish Iron Condors. I would likely risk $1000 to $2000 again, so either $10-wide or $20-wide positions, and either look to make $100-$200 on each trade, or leave trade open until expiry if SPX moves against my trade, risking the entire $1000.

Portfolio Status

Here is the current portfolio status, including unrealized P/L.

Because of multiple Zero DTE SPX trades, my day trade counter has gone up to 2, but now I am not worried about the Pattern Day Trader flag - the SEC has accepted FINRA's proposal to deprecate the Pattern Day Trading rules, so retail traders like me should be able to day trade without needing $25K in capital. There are still quite some nuances around other sorts of capital requirements, you can see the news here: https://finance.yahoo.com/markets/options/articles/sec-eliminates-25-000-pattern-050417843.html

Anyway, this does mean SPX will become even more attractive to traders, and I for one am beginning to think why even trade any other tickers. SPX is highly liquid, you can pick your poison among standard 45 DTE entry 21-DTE exit style trades, or Zero DTE trades, or anything in between and beyond. And especially if you do go Zero DTE, you get the added benefit of no overnight risk to your capital at all. It is definitely a food for thought.

I am getting more comfortable with the ebbs and flows of the market - and am looking forward to the next few weeks to see where this bullish momentum carries us.

Thanks for reading. See you next week!

📌 Disclaimer: Nothing on this site is financial advice - I’m just here to entertain! Here’s my introduction, my trading philosophy, and some ground rules.