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Markets are in “risk on–risk off” mode right now.
Stocks rally, and everyone gets on board… then those stocks reverse sharply and head back the other way. Another surge follows… Rinse and repeat.
The catalysts for those direction changes have been varied.
We’ve had on-and-off again tariffs… contradictory economic releases… inflation noise… and so on.
It’s easy to get frustrated. But my decades in the markets have taught me one very important lesson…
You can’t change what the market’s going to do. But you can adjust your strategy to best suit the conditions.
One way I’ve done this is by trading “zero-days-to-expiration” (0DTE) options.
We look to enter and exit an option trade right before the option’s expiration. I did a presentation last month to show how it works.
With 0DTE trades, we can capture short-term market moves without worrying about longer-term trends or upsets. And when we get it right, we can bring in outsized profits practically overnight.
We did just that earlier this week when we banked a 94.5% profit in one day by trading the Invesco QQQ Trust Series 1 (QQQ).
So let’s check it out…
Turbocharged Results
The QQQ chart below shows the choppy action since the start of the year.
These moves can cause sleepless nights for buy-and-hold investors. QQQ recently traded on its lows for the year. Anybody who bought the index earlier this year would be underwater.
And they might not know whether they should cut their losses or ride it out.
But this is where 0DTE trades fit into the picture…
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On Tuesday, the huge “risk off” move in QQQ looked overdone. Buying momentum seemed likely to rebound higher from oversold territory, causing QQQ to bounce.
So we set ourselves up to capture that move by buying a QQQ call option. A call option increases in value when the underlying stock (or index) rises.
Take a look:
Invesco QQQ Trust Series 1 (QQQ)
Source: eSignal
QQQ rallied sharply, enabling us to sell half of our position later that day for a 103.1% gain. We wanted to lock in that profit but still give the trade more room.
But that rally began fading, so a short time later, we decided to sell the remainder of the position for an 85.8% profit. That equated to a blended 94.5% gain overall.
That outsized gain follows the 0DTE profit we made on Palantir Technologies (PLTR) less than two weeks ago, where many of my subscribers generated double and triple-digit returns:
Love 0DTE trade of PLTR… After commission I realized over 122% gain! Love it.
– Xiping M.
My entry price was $1.25. My blended profit was 88%. Not bad for the first trade of this kind.
– James M.
Thank you for the first 0DTE trade alert. I had a busy morning and missed the initial alert. By the time I saw it, PLTR had moved down quite a bit. I adjusted your trade alert to account for the move down and bought the $102 call for $1.82 around 11:25am. I exited the position at 12:45pm at $2.90 for a ~60% gain. I know it’s not exactly what you had in mind, but the trade worked out well for me.
– Steve C.
Hey Larry first 0 trade WOW 144+% GAIN.
– Chuck B.
To be clear, we use options to make these 0DTE trades. Because options use leverage, they magnify gains and losses compared to just trading shares. And these quickfire gains can quickly turn into losses if the stock moves against our position.
That’s why risk management remains key… We want to be conservative with our position sizes and only risk a small portion of our trading funds with each trade.
But as you can see, 0DTE trading can be a great way to profit from a seesawing market. You can learn more about how it works right here.
Happy Trading,
Larry Benedict
Editor, Trading With Larry Benedict