Yep. We're alive. This is awesome. Another great day. It is Monday, as I've said in the past that Monday, it's our favorite day of the week. And why is that? Because we get to trade the zero dash DTE strategy. Today's episode, the title is...
Pumping Up the Reward with no Additional Risk. How can you say that Ernie?
How can you up the reward and not the risk that's because what we concentrate on is in fact, our risk to reward as our primary metric. All right. Now, let me explain. Unlike most other zero DTE strategies where their risk to reward is in fact, an asymmetric proposition. It is asymmetric in that their risk is much greater than their potential reward, much greater.
Usually by putting on an iron condor or credit spread with a low Delta, like a five or six or a seven. Their risk is usually anywhere from five to 10 to one. That's what it is. They are working all day by putting out 500 to a thousand dollars of risk capital, either on the ES or the SPX to make about a total profit of $50, maybe a hundred, however, they never go for that 50 or a hundred.
They get out. As soon as they achieve 50% profit, if they achieve it, they also put on stops that essentially turn their high pop strategy into a relatively low pop strategy. So most of the time they're riding and raving in anxiety, hoping that their trade will center again and not hit or not challenge the stop.
So that they can ride it out for as long as they possibly can to get that 50% of their potential profit. In other words, a 10 to one, or sometimes even a 20 to one risk to reward, and then they take it. Maybe that is their life. That is not our lives. Our lives are exactly the opposite. Additionally, they never have the opportunity to go for a winning trade.
A real winning trade let's see their biggest trades are maybe 15% return on capital. I'm talking about a hundred percent. That would be great. Wouldn't it? Or what about 200%? That would be unreal. What about three or 400%? That would be outstanding. What about a thousand percent or 1500%?
That would be insane yet. That is what we do almost every trade. So today we started out with a one to nine risk to reward and then without putting too much more capital in the game. In fact, just another 30%, we're able to increase that to a one to 13 risk to reward. So our total capital outlay was still under our average for a typical position, even though we put two positions on because it gave us that additional risk to reward.
So now we're sitting here with a very small risk to reward with the potential. So in other words, okay, let me put it in numbers. Put out about $140 on two positions for the possibility of making $1,800. That is what I am talking about. That is what I am talking about. Pumping up the reward with virtually no additional risk.
You might say, oh, but Hernie you were putting on $40, extra risk. That's putting on additional risk. Yeah. Okay. You got me there, except that it was still under our, what we would consider our max sized singular position. And we increased our overall reward. By nearly 40 yeah, it's about 40%.