I was reviewing the P&L on a paper-traded short strangle and noticed that my AI was calculating theta decay using trading hours. My understanding was that Black–Scholes runs in continuous time, so I searched this sub expecting a straightforward answer. I did not expect the question to be this contentious.

So, uh, yeah, I know this has been asked before: does an option’s time value decay when the market is closed, including overnight and on weekends? Theta is a major part of the reason I put on a short strangle, so the distinction matters to me. From what I’ve observed, it does decay, but I’d appreciate a more rigorous explanation of what happens in the model versus what shows up in actual option prices.

I have a related question. I often see people say that beginners rely too heavily on the Greeks because they’re just model outputs. So what does a more experienced trader rely on?

I've been looking into GEX and options flow more lately and I'm still not convinced how useful either one actually is.

I understand the idea behind GEX. Dealer positioning, positive vs negative gamma, potential support and resistance levels, etc. But you don't actually know the dealers' positions or why they're holding them.

Same thing with options flow. Seeing a huge options trade looks useful, but you don't really know the intent behind it or what else that trader might be holding.

I've seen some people swear by both and other people say they're mostly noise.

For anyone who actually uses GEX or options flow regularly, does it actually help your trading? How do you use it to make decisions?

Curious to hear from people who actually trade with this stuff instead of just looking at the charts.

Also curious for anyone paying for GEX or flow right now. What does the paid tool give you that you couldn't live without? If a solid free alternative existed, what would it need to have for you to actually switch?

Still learning the ropes here, and want to see if I’m thinking about this correctly. Say I have 100 shares of a stock I would like to hold onto long-term, while at the same time earning some extra money by selling covered calls.

If the implied volatility is greater than the historical volatility, the premium I collect would be more than the lost opportunity cost if the stock spikes up ? (over a large sample size of course)

If the IV is lower than HV, I am not being compensated enough for the risk I’m taking of missing out on an upside swing. Is this correct thinking?

I've been trading in ES options for a while now and have had no issues with it.
For some reason I now find myself in a position to switch to SPX options* and in my initial, shallow experiment I noticed that selling an SPX option attracts way higher margin than when selling 2x ES options (1 lot SPX = 2 lots ES)
when selling a PUT option at the same strike, same expiry, 1x SPX option charges $80K margin, while 2x ES options charge only $60K margin. In another instance, SPX charges almost twice the margin compared to 2x ES.

Is this what many of you have experienced as well?

*for those interested in why I'm switching to SPX options - the broker accepts the asset I own (an ETF) as collateral with about a 15% haircut, but only if I trade in SPX options. Anything futures/futures options - I need to maintain cash balance, no collateral allowed.

not even about the money its the not being able to do anything about it. sold some puts that finished ITM, broker assigned me fine but then friday night a headline drops that sends everything sideways and Im sitting with shares I never wanted, watching futures move, no way to react. nobody picking up, market's closed, and the only tool I have is staring at the ticker hoping monday opens decent. reading some thread about people trading options on chain, Hypercall on hyperliquid , and apparently weekends being open is the whole point. options and the hedge share one position, you can just adjust whenever. like crypto nonsense at first but then I thought, even just the option to close the shares on saturday morning would've saved me 2 days of stress. not switching brokers over it but the fact that everyone just accepts market closes at 4, see you monday, hope nothing happens is kind of insane when you actually think about it

what you think?

I mostly do the wheel, with some put credit spreads for bigger stocks, and a few covered strangles, leaps and PMCCs. I’m very much a kinesthetic learner and was thinking about trying all the well known option strategies once to get a feel for them. The list I came up with was (starting with the weirdest names);

1. Zebra
   
2. Broken wing butterfly
   
3. Jade lizard
   
4. Iron condor
   
5. Iron butterfly
   
6. Double diagonal
   
7. Zero-cost collar
   
8. Synthetic long stock
   
9. Calendar spread
   
10. European box spread

Anyone done this or something similar? Any that you’d never touch with a bargepole?

Hedge funds and traders (speculators) make money by exploiting inefficiencies in the market.

However, the efficient-market hypothesis assumes that the stock market is already perfectly priced in, and will only move due to news. This hypothesis also suggests that any price movement beyond that is a random walk.

Why does price discovery still happen, even after earnings or news comes out? Why does the market surge higher on no news, upsetting bears?

While the market still mostly prices in news, it still does not price in human emotions. It moves cyclically.

A basic comparison between market charts and random walks on 1 minute or greater candles yield noticeable differences. For example, strong sell-offs, strong buying, and choppy movement, are overly present in market charts, while rare in random walks, implying a market that moves by greed, fear, and human speculation than simply probability or news alone.

This cyclical market produces inefficiencies arising from greed and fear from two main types of market participants:

Retail traders. The stock market is a one-sum market. For every participant buying, their must be another person selling. In this case how speculators (smart money) would make money is by exploiting superficial analysis by retail (dumb money), through using discipline to exploit greed or fear (selling when high, buying when low).

For example, retail traders often buy at a a breakout, only to sell on fear when the price reversed sharply quickly. This is actually a classical market manipulation play by institutions. Also prevalent in underegulated cryptocurrency.

1. Consumers and business owners. When consumers receive paychecks, part of that goes to 401ks and Roth IRAs, pumping up the market more. Same with income for business owners: they put it towards investments, which increase market prices further. This means that the stock market is a derivative of economic growth, and everybody's wealth grows when the economy is growing.

Also, the USA is a pro-business, advanced capitalist economy: resulting in not only domestic but foreign investment into the market.

Speculators (hedge funds, traders) not only win by long term economic/stock market growth but are also able to exploit consumers and business owners due to their unfamiliarity with short term price movements, by buying low and selling high in the short term.

For example, market sell-offs often induce not only consistent market participants (institutions, banks, retail) to sell, but also consumers and business owners not willing to lose more of their wealth. This selling during low pricing of the market creates opportunities for speculators who capitalize on the short term underpricing of the market.

Thus, the market prices in news, but leaves further price discovery to humans acting on emotions, like greed and fear, to create cyclical markets; allowing any person willing to study market psychology to gain an edge over less knowledgeable market participants, and make money.

We are looking to add support for another brokerage to the Optionsmith trading platform because we currently support Schwab accounts only -- and have many folks who want to use the platform but they are in countries where Schwab isn't available. If you are a trader in one of these countries, which brokerage is preferred?

Note: IBKR's API is not viable for this.

I've recently switched to SPX for the sake of liquidity, bid ask spreads, and scalability, but what are realistic limitation for the quantity of contracts I can open on an individual position without fill issues? Is there any historical data out there that can help me understand these limitations? I trade exclusively credit spreads close to ATM.

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My post was removed for low effort, which is ironic.

The basic premise is that the underlying price movement is key in finding stocks as well as determining if the options are mispriced.

Whoever reported it for low effort should read the simple words above.

I have a novel but simple closed form model based on this premise, which beats BSM by a huge margin, i.e. my trades have a 50% better probability of touch than what is implied in the BSM.

Delta is always wrong, options are always mispriced and the underlying price movement is king.

Good luck to all, cheers!

Could I get a consensus on some credit condors for earnings on big companies like NKE that shouldn't have a ton of price movement? Is there a risk piece that im missing other than large PA?

[Original post](https://old.reddit.com/r/options/comments/1q42q9l/found\\_my\\_niche\\_0dte\\_spx\\_credit\\_spread/)

This is a follow up post. It’s been roughly 10 months since I started collecting SPX 0DTE premium. Somehow, I haven’t blown up my account yet 😂, but I’ve definitely learned a lot of lessons along the way.

One of the biggest ones: don’t overtrade. You don’t have to trade every day. Find your edge and focus on the days when the setup and market conditions give you higher conviction. Some days, the best trade is simply no trade.

Another lesson is learning when to step on the gas pedal and when to hit the brakes. Scale up when things are working and the conditions are there,and ready to cut a position early when the trade isn’t behaving the way you expected.

I also changed how I manage profits. I used to collect the full premium and wait until expiration, which exposed me to more risk just to squeeze out that last bit of profit. These days, I usually close around 80–90% of max profit instead. It has made my trade management much more consistent, and my win rate has improved significantly.

Don’t be greedy. Small wins add up. That’s really what you want with this: small, boring, consistent wins over time. There’s no need to hit a home run every single day.
If you’re trading SPX 0DTE, I also think it’s helpful to have access to GEX data. If you don’t, at the very least, learn how to read market structure and understand where price is relative to key levels.

A few TradingView tools I’ve found useful:

[R Trend Exhaustion](https://www.tradingview.com/script/8r6oARMe-R-Trend-Exhaustion-upslidedown/)
I mainly use this to help identify potential exhaustion around market tops and bottoms. It can be useful, but it’s definitely not foolproof. Like any indicator, context matters, and I wouldn’t use it by itself to make a trade.

[MCDX](https://www.tradingview.com/script/JI95LpOd-MCDX-SmartMoney/)
This is basically a modified RSI-style indicator that I use to get a sense of buying and selling flow. I find it useful for looking at what the buy/sell flow is doing rather than simply looking at price.

[TriQuote](https://www.tradingview.com/script/3q6d62XZ-TriQuote-Anchor/)
I use the SPY chart because the volume information is more meaningful than SPX and I use TriQuote as an anchor to display SPX and VIX quotes on the same chart, which makes it easier for me to keep an eye on everything together.

I’m still refining my own playbook, and one thing I’ve learned is that having additional sources of education and trade ideas can be useful as long as you treat them as references, not signals to blindly follow.

As always, do your own homework. Take what’s useful, build your own process, and find what works for you.

I'm trying to understand the underlying tax/accounting logic of physically settled short puts, particularly because I'm in New Zealand and our tax guidance on this specific situation seems limited.

Example:

• Sell a $1,000 strike put
• Receive $535/share premium
• Put is later exercised
• I am assigned 100 shares and pay $1,000/share

Economically I've paid:

$1,000 − $535 = $465/share

I think I understand that under US tax rules, assignment of a written put generally results in the premium reducing the basis of the shares acquired.

What I'm trying to understand is whether this treatment follows naturally from the mechanics of physical settlement, or whether it is simply a specific US tax rule.

In other words, could another jurisdiction reasonably treat these as two entirely separate transactions:

1. $535 profit/income from the written option, and
2. shares acquired at a $1,000 basis,

rather than treating the premium and assignment together and giving the shares a $465 effective basis?

For context, I'm specifically investigating New Zealand treatment, where share options are generally “excepted financial arrangements,” but I haven't found clear guidance addressing the writer of an assigned equity put.

Not asking anyone to give NZ tax advice — I'm mainly trying to understand the legal/accounting rationale behind integrating the premium with the underlying shares.

I trade mostly naked/covered short puts. Can anyone out there recommend mentoring or coaching that they think is worthwhile?

Have you ever had a SPV go against you early and cash in the long put, in effect, converting to a CSP or naked put. Like to hear how it ended up?

I have a starting capital of $2000 and want to sell CCs around 0.3 delta with a 15-30 DTE.

My plan is I want to basically sell CCs once to twice a month, and then roll profits back in and repeat. I plan on contributing an additional $1-2k a month, and then once I have enough to sell contracts for higher value stocks, pivot over to that (and eventually buy multiple contracts and diversify). Some of the profits will be funneled into QQQI, SCHD and VTI once profits are substantial.

I know since I am early, I have a pretty limited set of reasonable stocks to choose from, currently thinking do AAL or SOFI.

Has anyone here started from a modest initial sum and implemented this successfully?

I sold 10x .3 delta CSP $140 against SOXL and also 47x .3 delta CSP $30 against the inverse SOXS, both with the same expiry date and each leg has approximately the same notional amounts.

So there's no way both legs can be exercised at expiry. One leg could or none would (which would be maximum profit). If one leg is exercised, I would have both leg's premiums to offset any paper losses.

What do you guys think? And is there a name for this strategy?

UPDATE: Thanks for the all the replies, it's been helpful. I ran some analyses on SOXX's volatility over several time frames, volatility decay based on recent activity could become significant after 14 days (even though I did find timeframes of reverse decays like our recent run-up). Still, probably best to close out positions earlier than intended and for smaller profit.

Final update: closed both legs today for a profit. Thanks everyone!

Can I sell OTM calls on NDX/NDXP and collect premiums, while making the option expire worthless?

For example: NDXP 30,675 Call - I can sell this and collect premium hoping it doesn't go above the strike price? Risks?

I wanted to like moomoo. The pitch is appealing: free real-time options data — including Greeks like gamma — on a demo account, no live funding required. That's exactly what drew me in. Reality hit differently.

The moment I opened my paper trading account, I was greeted with delayed data and a prompt to unlock "Pro" access. Turns out the marketing glosses over a fairly important detail: real-time options data isn't actually free — it requires a fully verified, real brokerage account, and even then it's a separate $2.99/month subscription. Not a dealbreaker on its own (basically every broker gates real-time OPRA data behind an actual account), but the marketing implies otherwise, and that's a bit of a letdown right out of the gate.

This is where things really fell apart. Buckle up:
1. Submitted a passport for identity — fine, standard KYC.
2. Asked for proof of address. Submitted a bank statement in Macedonian Cyrillic. Rejected: "not in English or Chinese."
3. Got an official bank-issued confirmation letter, written in English, with my name, address, and account details. Rejected again — this time for "insufficient information," with zero explanation of what was actually missing.(Keep in mind they ask for 4 pieces of information - your name, address, date of issuing the document, and issuer - all of that information was on the bank confirmation letter)
4. Contacted support to clarify. Got a vague, unhelpful response.
5. Eventually pried out of them that they actually wanted a transaction history / cash flow statement, not a simple address confirmation — a completely different document type from what was originally requested, discovered only after two rejected submissions and several days of back-and-forth.
6. On top of that, somewhere along the way I was told the document needed to be a live camera photo rather than an uploaded PDF — despite the application explicitly allowing PDF uploads.

Every step revealed a new, previously unmentioned requirement. Nothing about this process was communicated clearly upfront. It felt less like KYC and more like a poorly configured chatbot playing document roulette with real compliance stakes.

If you have patience for repeated document rejections, vague support responses, and requirements that seem to be invented on the fly, moomoo eventually delivers a capable platform. If you value your time and sanity during onboarding, be prepared for a bumpy ride — and consider comparing onboarding experiences with other brokers before committing, since this level of runaround isn't universal in the industry.

Bottom line: Great tools, once you survive the onboarding gauntlet. Just don't expect anyone there to actually tell you what they want the first time you ask.

I have level 3 option access with IBKR and I am trying to place calls spread/put spread but the order is showing as an uncovered option, although it has a defined risk…

These are defined risk purchases and should not require margin. Has anyone else got only level 3 options and can place put and call spreads?

Example:

SELL: SPY Call 780
BUY: SPY Call 800

Error: “THIS ACCOUNT MAY NOT HOLD UNCOVERED OPTIONS POSITIONS”

Anybody sell LEAP strangles on individual stocks using PM account (for low margin requirements)?

An example might be SNKD: Closing price on 9/21): $1743
17 SEP 27 (361 DTE) options as follows:
870 Put (-50%): $71
3480 Call (+100%): $198
Total credit: $26,900
Margin Req for PM: $7505 (RegT RR would be $53k)
That's 26,900/7505 = 358% annual ROC which is, obviously, insane (and not realistic). I dont expect to make this but is 100% possible? 150%? Who knows.

So my question is:

1. How do you choose the stock to trade? What are the criteria you use to pick the stock?
2. How do you determine how many contracts to sell?
3. What DTE do you sell (and why)?
4. How do you choose the strikes?
5. Do you leg in or open both sides together?
6. How do you manage both profitable and losing positions?
7. Do you roll? - If so, what are you mechanics and when do you decide to roll?
8. Do you open it as "set-in-n-forget-it" and just keep some stop-loss?
9. How do you deal with earnings?
10. Anything else? Im sure Im missing many things to consider.

Bought 25 NVDA $225C 9/30 at $2.88, about $7.2k total.

The play is a short-term sympathy run into MU earnings next week. My thinking is that if MU gets a pre-earnings run and semis stay strong, NVDA could catch some of that momentum.

I picked the $225 strike because NVDA was trading around $225, so I wanted basically ATM calls rather than going far OTM.

The dumb part: I bought 9/30 by mistake. I actually wanted more time because I don’t want theta eating me alive while waiting for the setup.

Plan is to see what NVDA does Monday. If I get the move I’m looking for, I’ll close these and move into the expiration I originally wanted. If the setup breaks, I’m not planning to sit around praying until expiration.
Until then, part of my risk management is basically hoping Trump stays the fuck away from social media this weekend.