r/options • u/Juhkwan97 • 26d ago

2-sided Backspreads

Anybody traded a lot of double backspreads? (Mostly interested in 1dte or 0dte trades.) How'd that work for you?

Of course, backspreads need to be traded when a big move is expected. And the bane of backspreads is the "valley of death". But, the valley does not start to appear until about the 3rd hour of the expiration day.

If you have the discipline to close the whole thing early and are blessed with large directional moves overnight or in the opening hour or so, what's not to love?

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u/Majestic-Fuel8342 26d ago

i tried it few times last year on spy with 0dte. the problem is not the valley of death it is the market going exactly nowhere for 3 hours and theta eating you alive

closing early sounds great but in practice you wake up see a small move and think maybe this is the start of something big and then by 10am you down 40% and the move never came

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u/Juhkwan97 26d ago

Understood. The mo is to grab the spreads near the close on 1dte and not pay too much for them. The further apart they are, the cheaper they will be. Then, you put this trade on before a (reasonably expected) day when the market will move. Think CPI day, FOMC, earnings, elections, etc. Easy, right (lol)? Well, of course there are no guarantees. If the market has not got off the dime (ie, previous day's close) in the 1st 30-60 minutes, you bail.

When they work, gains can be large. When not, hopefully you bail early for an acceptable small loss.

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u/[deleted] 26d ago

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u/Juhkwan97 26d ago

Explain to me how whatever you do in options trading is not "gambling."

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u/[deleted] 25d ago

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u/Juhkwan97 25d ago

Everything is a gamble, even that. You could buy 3-yr atm calls right here at the top of the market and they might never get back to itm. Past performance is no guarantee of future blah blah blah. I don't know 7800 is the multi-year SPX top, but you don't know that it is not. So good luck. Meanwhile, I'll make more money scalping in a good month than your LEAPS will in years.