How I Day Trade 0DTE Options with an Edge Using Option Alpha

“A golfer can’t force results to happen. He can only do everything possible to give those results a chance to happen.” - Dr. Bot Rotella, sports psychologist

This is one of my favorite quotes. As a former competitor who has played in dozens of amateur and professional golf tournaments, I found the mental game was often the most important factor. When I started trading eight years ago, it was easy to replace ‘golfer’ with ‘trader,’ and I carried that same approach into my trading: Use all information available, trust the process, evaluate execution over results, and never enter a trade without knowing why.

In trading, just like golf, it’s impossible to have confidence if you don’t have a plan before opening a position. Golf requires hours and years of practice and repetition. Luckily, in trading, we can use historical data alongside real-time pricing and information to guide our decision-making.

Why I day trade options

I was always drawn to day trading from the start, because it allows me to deploy  my capital strategically every day. Money isn’t tied up for days or weeks at a time, and I have much more flexibility. Each day has new opportunities, and my positions aren’t as sensitive to larger market moves. Plus, with options, it’s very easy to play the market both ways, or neutral, based on that day’s data.

The downside is that day trading used to take up a lot of my time. It required an early routine and forced me to be in front of the screen watching the market, tracking indicators, checking if the symbol gapped up, broke out of a range, etc. With a full-time job, a young daughter, and no guarantee I could be placing trades when I needed to, it wasn’t sustainable. In fact, I had stopped day trading altogether for a while, and it’s only recently that I’ve rediscovered my love for it now that I have the tools to do it more confidently and, most importantly, more efficiently. I've become a full-fledged 0DTE options trader.

Day trading 0DTE options with Option Alpha

From the beginning, I have loved relying on backtesting and historical data. It was essential to build confidence and stay focused on execution when I could support my ideas with data. My worst trades always came from taking a trade “just because” or from a “feeling.” Turns out the market wasn’t interested in my thoughts or ideas.

So I returned to the above quote often, a reminder that I can’t force a trade to happen. I need to do everything in my power to give myself the best chance of success. I need a reason to enter a trade and a plan to exit the trade. No exceptions. It’s not enough to simply log in and trade on a feeling or when I happen to have a free minute to open a position. That is a recipe for long-term disaster.

For me, it boils down to: information, automation, and analysis. Together, this gives me the confidence I need to evaluate, enter, and manage positions, plus the discipline and consistency required to day trade successfully over a long period of time. Even though trades are short-term, longtermism is the mindset for options traders.

Luckily, Option Alpha gives me a day trading platform that provides all that.

Finding my edge

My day trading strategy revolves around two core ideas. One is backtesting, optimizing, and automating various 0DTE SPX trades. My two main strategies I automate from backtests are neutral iron condor or iron butterflies. I’ve backtested hundreds of variations of position details to find a setup I’m confident in, and use a bot to enter and manage positions daily.

Here’s a look at a 0DTE XSP iron butterfly strategy that generates steady income with minimal risk:

My other favorite automated 0DTE strategy is using the 60-minute opening range breakout (ORB). After testing a bunch of different variations, I chose to an SPX 0DTE short put spread with an entry trigger with a breakout of upper level of the 60-min opening range. BUT, after some backtesting, I found this worked best when the market gaps down, and had a smoother return when I centered my position at the opening range mid-price.

Honestly, tweaking and optimizing backtests is one of my favorite parts of trading. I don’t know if I would’ve stumbled upon this new favorite strategy if I didn’t have all these different variables available to test. And having the historical performance to view makes it much easier to be confident going forward, knowing I’ve done the homework. Plus, automation makes this strategy much more doable. I can have the bot check if there’s a down gap, check the opening range, and set my option legs exactly where I want them, with a minimum reward/risk filter. Everything I would have had to do manually previously is offloaded onto the bot.

Using GEX to day trade 0DTE options

My other main day trading strategy uses 0DTE SPX long call spreads based on intraday gamma exposure (GEX). Adding GEX charts to the Option Alpha platform has been a game-changer for me. It provides me with a clear picture of market activity and, most importantly, a reason to enter a trade and exactly when and where to open a position. With some manual checks, I’m able to quickly identify if there is a trade to be taken, and then hand off the entry and monitoring to a simple bot I created to day trade SPX with GEX, giving me a 'hybrid' approach to day trading where I can manually find trading opportunities and automate the rest. Here is a simple breakdown of how to Identify Bullish 0DTE Trading Opportunities Using Gamma Exposure.

Here's a great example of a profitable trade I opened using a GEX pillar strategy to find a high probability entry point when price fell below a specific strike price. In this example, I manually identified and targeted 6,800 and had the bot open an SPX 0DTE long call spread when price fell below that level, and quickly took profit less than an hour later.

While I still love having some manual discretion and daily interaction with the market, the ability to automate key components of my day trading strategies is critical. Automation gives me confidence, consistency, and efficiency. Backtesting and live data provide confidence in what I’m trading, and ease of mind knowing the bots can watch the market, even if I can’t. 

Automation also creates far more consistency than I could dream of when trading manually. I think of my bot’s automations as my ‘trade plan,’ so I can input everything I need and know the bot will consistently – and objectively – follow my plan. No emotions. No compromises. No thinking.

Analyzing trading results

Finally, Option Alpha comes complete with detailed performance analysis tools. Bots let me group my strategies, so I can easily compare them and track results. The Analyzer gives me the feedback I need to continue trading with confidence, and allows me to pinpoint areas I can improve. For example, maybe I should limit my trading after 3:00pm?

With the fast-approaching, much-anticipated change to PDT rules, I’m excited to see how retail traders perform without the day trading restrictions. Traders with small accounts and a disciplined, automated approach to position management will succeed, in my opinion, and the ability to exit intraday trades across multiple tickers will create an abundance of opportunity.