Day 76 - End of Week 28 - First Zero DTE

Market Recap

The market moved down quite a bit last week. SPY moved down by ~18 points and QQQ moved down by ~16 points.

• SPY: -$17.99 (-2.8%)
• QQQ: -$15.99 (-2.8%)

Year-over-year:

• SPY: +$85.48 (+15.96%)
• QQQ: +$102.16 (+22.66%)

Trading Update: July 28 – Aug 1, 2025

Here is a summary of all trades I made during the week.

• Unrealized Profit/Loss: +$352
• Realized Profit/Loss: +$249

Trades

I placed a few trades this week, leaning into margin. I have not used margin per se, but it does allow me to trade naked options, so that is what I have been using it for. This approach is inherently risky so I am trying to keep my used buying power at about 70%. Eventually as I have more capital, I will reduce the risk and take the used buying power down to 50%.

This week I attempted a couple of Zero DTE (Days To Expire) trades. They were both placed on a Friday, one each on SPY and QQQ.

Both SPY and QQQ are on my watchlist and I noticed a slightly higher volatility than other days. Typically, I have started to look for over 40-50% IV to place 45 DTE trades. But the volatility in SPY and QQQ was not enough though to want me to commit to a 45 DTE trade.

So the situation was that I had a data point about volatility being higher than usual in a couple of tickers I track, I knew selling when volatility is high results in a good premium, but the tricky part was that the time to let the trade run was not in my favor.

So I decided to place a couple of Call Credit Spreads and let them run for a couple of hours. That would give me some profit if I was right on directionality, and give me a defined loss if I was wrong. There was still a catch - closing the trade before end of day will go against my day trade count and I will be close to being flagged as a Pattern Day Trader. And if I get flagged for Pattern Day Trading, then I need a minimum of 25K USD in my portfolio to continue to trade, which is something I want to avoid right now.

Yet, I decided to take that risk. The calculation being I will not need to place another such trade in the next few days, which should reset my day trade counter back to zero.

Now the question was of how much to risk.

Typically, I look for 50% of original premium to consider a trade successful. For a short turnaround though, I decided to target 20-30% of premium, and furthermore, I chose to define the risk at $300 each for SPY and QQQ. So if I was right, I was aiming for $60 on a $600 risk, to happen within 3-4 hours. That would still keep my small account intact without blowing up, and I would live to fight another few months to claw back the lost amount. Of course, I had no desire to lose the whole $600, I would manage out the trade the moment I lost 100-200% of original premium.

With this hypothesis in mind, I placed and got filled both on SPY and QQQ, getting $82 in premium initially when I placed the trades.

Then I tried to distract myself with other stuff, got a bit greedy, and placed a rather unnecessary Call Credit Spread on HOOD, with a more traditional 45 DTE. HOOD had an IV of over 60% and I thought to risk $500. The hypothesis was that HOOD stays within its expected move range over 45 days. I say greedy because I bet that the expected move range itself was too wide, and that HOOD should no longer be moving around that much. Typically, I go a little outside of expected move, just outside of 1 Standard Deviation, to pick a price at which I sell the option. Here, I did something different.

There was a $17 expected move, and if you see above, my HOOD trades are well within that range, which means they have more risk than I usually take on. I will likely close this one out at a loss unless HOOD drops slightly and I can eke out a dollar or two for a win.

Back to my 0 DTEs, I started trying to monitor again around the 11 AM mark since I wanted to close the trade an hour before end of day. Luckily, both SPY and QQQ wobbled up and down and I caught a small down move and was able to close the trade at my desired profit. Note that I would have closed the trade anyways, even if it was at a loss, since I did not want to just let it expire - I am not comfortable trading zero DTEs and this one required so much babysitting I wonder when I will place my next one, if I place one at all.

Outside of the above excitement, I sold a couple of routine Puts. Right mix of IV, Premium, and Time Remaining - one each on GOOGL and UBER.

UBER is not something on my watchlist, but I got hold of it from an IV watchlist from TasyTrade, much like a Target trade I made a couple of weeks back. Hoping to get a similar outcome in this trade as well. Here is what I said about TGT back then, and I think the situation this time applies to UBER. We will see how it goes!

Then I spotted TGT having higher volatility than usual and made a quick in and out trade (by my standards), capturing ~35% of the premium in less than 24 hours. This was a fantastic mechanical trade and gave me a lot of satisfaction - the IV% was > 50% on TGT - I did not care about the reason - the option price had a very high premium even at a measly 10∆, and of course the volume was great.

Portfolio Status

Closed this week slightly higher than last.

• 2025 Net P&L: Down $3K
• All Time: Down $6.23K

Profit and Loss Trend - Monthly - Year to Date

Portfolio Strategy Breakdown

Here's a view showing my Win Rate breakdown by strategy deployed.

Here is a breakdown of P/L by strategies I have used so far.

• Best Performing Strategy: Sell Put
• Worst Performing Strategy: Buy Call (LEAPS)

Plan for Next Week

I have 3 open positions that currently are in red.

Each of them have a few weeks of runway remaining so I will monitor and manage depending on how much the market moves next week.

I am maybe 5 wins away from bringing my TastyTrade account to green, or just one away from a massive red! Looking at my win rates, I am inclined to believe my probability of profit would soon line up with the deltas I have been using, which is between 15-20, and thus about an 80-85% chance of profit. The tricky part is to ensure the limited losses don't drown out my profits.

One thing I am trying to train my mind on is to be able to tune out all the expert noise around economy and how policy makers may affect the markets. I inherently understand there is nothing I want to and perhaps can do to influence those aspects of reality, so what is the point of trying to base my success on those factors. In a similar vein, I also do not want to learn about the fundamentals, etc. of a stock or business, I just want to be able to trade it successfully. And to do so, I want to continue to refine my approach to not rely on managers and executors of said businesses to influence my profit.

Considering that over the last decade, I have mostly just been doing index funds and some gambles on popular NASDAQ favorites like AAPL, AMZN, MSFT, etc. - it has been an uphill battle to unlearn those habits.

But this is a long game and I love a challenge, so I continue onward.

Thanks for following along - 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.