2024年7月1日星期一

♟ The Biggest Winner in the ODTE Trading Explosion

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"Zero-day options have gained in popularity in recent years, as traders shoot for the moon."
The Wall Street Journal

Bryan Bottarelli, Head Trade Tactician, Monument Traders Alliance

Bryan Bottarelli

I've been involved on Chicago Board Options Exchange (CBOE) for half of its existence (nearly 24 out of its 50 years)

And today, 50 years since launching, options trading has continued to ignite a multidecade level of consumer demand that has surpassed the wildest imaginations.

The newest trading trend is the rapid advancement of options that expire in one day of less – which are commonly referred to as Zero Days Till Expiratoin (or ODTE for short).

I firmly believe that these instruments will forever redefine how trading works... and in the process, could make some of the early adapters who understand this unique moment fortunes beyond their imagination.

From this day forward, the way to trade will never be the same.

And here's why....

According to Goldman Sachs, over 40% of all S&P-related options now expire on the same day. That's more than twice the volume from just a year ago.

In other words...

Nearly HALF of all S&P options volume is 0DTE!

Chart: Exhibit 141: 0-day S&P options volume now accounts for nearly half of all S&P options volume.
 

Furthermore...

The number of contracts that traders opened on the option's last day soared +60% between January 2022 and January 2023.

Why are ODTE options so popular?

Simple: They offer low-cost opportunities to hit fast, massive returns.

You see, 0DTE options tend to have lower premiums, which can make them less expensive vehicles to use to take a position on short-term volatility.

If you're quick enough – and you time the markets correctly – you can make a lot of money – fast.

Case in point...

Millionaire trader: "Throw out your stock scanners. Use ONE ticker for BIG potential payouts."

Crazy stressed businessman destroying his desk and laptop with a baseball bat, job burnout concept
 

Since August, Millionaire Trader Nate Bear has been DOMINATING the markets with a revolutionary strategy that involves ignoring 8,251 of the 8,252 publicly traded stocks.

Watch His Demonstration Here

Here's a note that we received from "AnOldDuffer" who explained how he made +351% overnight trading these assets – while on the golf course.

Image of a testimonial from AnOldDuffer on 6/12/2024 at 2:20:12 p.m. - Yesterday sometime, before I headed for the golf course (around 10:00 CDT) I noticed that IWM was down over 1%. Since I would not be home in time for a dark trade, if it held 'til the end of the day, I picked up a small position CALL (IWM) JUN 12 24 $202 for $.90. When I got home around 6:00 I noticed there was not a dark trade. So I put a limit sell order in at $1.50. This morning I was on the Golf Course again before the market opened. I was amazed that my position sold @ opening for $4.09. Thanks BB for teaching me how to fish on my own-this time for a 351% gain.
 

Now, here's the best news of all...

You don't need to make fast "in and out" trades to benefit from this trend.

You don't even need to trade options either.

You see, the biggest winner in the oDTE trading explosion will be the exchange that profits off trading volumes – which is the Chicago Board of Options Exchange (CBOE).

Chart: The CBOE Benefits Most from 0DTW Trading
 

The top beneficiary of the 0DTE (Zero Days Till Expiration) volume trading explosion is the CBOE, which is the exchange where these assets trade. The CBOE profits off index options volume – which is now exploding higher and higher with each passing day. The easiest way to trade this could be buying CBOE stock around the $167-$170 support lows. And as you'll see in the chart above – we're currently close to that support level as of July 1.

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YOUR ACTION PLAN

With nearly half of all trading volume on the S&P 500 coming from ODTE's, it's clear other traders are seeing the possibility for explosive returns on these trades. However, most people are using them the WRONG way.

Click here to see how I trade ODTE's in a way that puts the odds in MY favor.


Chart

MONDAY MARKET MINUTE

  • Another Holiday Interrupted Week: The markets are open a half-day on Wednesday – and closed all day on Thursday – in observation of Independence Day on the 4th of July. With the earnings calendar as thin as ever, most trades will be swings/scalps for the week. Tracking.
  • Honeywell (HON) a Potential Buy: Barron's predicts 40% upside as the pandemic impact wears off. A sum-of-parts valuation of their building, automation, and energy units a stock value of around $278 per share, which is well above their current price of $213.
  • Keeping up with Metals: One of this year's best performing commodities is silver – which is up 21% year to date – and out-performing both gold, copper, and the S&P 500. It could be a reason to move back into Wheaton Precious Metals (WPM).
  • Oil on our Radar: As the technology trade seems to be fading and aging – it could also be time to revisit oil names like Occidental Petroleum. Tracking.
  • JOLTS on Tuesday: Most of the economic action this week will fall in the first half of the trading session – most notably the Jobs Opening and Labor Turnover Survey (JOLTS) this Tuesday around 9:30 a.m. EST. The Bureau of Labor Statistics forecasts 7.9 million job openings, which is roughly 150,000 less than April. This could indicate that openings are normalizing after being elevated for three years post-pandemic. To see exactly how I'm trading the JOLTS report, click here to join Catalyst Cash-Outs.

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