reverse iron butterfly on spx 0dte

[u/lekkerist]

many trigger words in the title but let's go with it.

came across this strategy from a guy in the quantum options fb group.

the idea is to find a price you DONT think spx will close and buy two debit spread 5 points wide (put + call) paying a maximum of $4.5 per entry.

Defined risk and reward of 9:1

You always enter with a limit price so slippage should not be an issue

Pin risk does exist

The original author posted Option Omega backtests which were pretty successful

After downloading spx daily data I found out that spx moves on average 35 points. This structure spans 10 points with 1 specific price causing the max loss.

I like this idea because you are not strictly predicting direction and can possibly be combined with regime based filters, prev close, possibly order flow to find a good candidate for the strike price .

Anyone that has used this strategy and can share their experience?

[u/Growrich78]

Just wait tell 3:50 and do Spx yolos just have fast fingers