Around the Clock with SPX
By Ernie Varitimos
November 16, 2021
0:00 / 12:53
Around the Clock with SPX

Got a dog under my feet. Hey dog. What are you doing?

He's a big dog

doing friends. It is Ernie here and it is Monday another zero DTE day, November 15. And we are just, one week away, less than one week away from a very, very important event or change in the market. An extremely important change in the market. That's going to make a huge difference for a zero DTE trader.

First of all, let me just, for those of you who do not know what, is Zero DTE? Oh my God, what are you talking about? Zero DTE stands for zero days to expiration. That is something referring to people who trade options and in particular, It's referring to the options contract and that very last day of expiration when it's no more and all the premium gets sucked out of it, exponentially and people who are selling that premium are smiling.

People who are going long, those options are usually not smiling anyways. That's what we do here. We do strategies that trade the very last day of expiration or zero DTE. And most people, when they employ some strategy around that event, they are trading the SPX. Now the SPX has some limitations and it also has some things that are good about it for trading the Xero DTE, and probably the best for people who are afraid of options is the fact that it is cash settled.

And you don't have to worry so much about whether or not. You go into expiration. You're not going to get assigned a big contract. You can't get assigned an SPX because the SPX isn't real. It's just a calculated index by dog.

So that provides some level of comfort. The margin is very large and the commissions on it are relatively affordable. The problem is that it only trades during market hours. So you're missing out on this wide range of time. That happens when the world is happening and the S and P is happening, but the index isn't happening, what's going on there.

The world is going on all around us. The futures contract is out there tracking the world, but the index itself is not. And so that is extremely limiting about when you can enter a trade or. When you can, when you entered the trade has a lot to do with how much premium that you can, amass in that particular position.

And the fact that you can not do it until the market opens is again, very, very limiting, but that's all gonna change in a week because on November 21st, the CME has decided that they were, they are going to trade. SPX the index around the clock, 23 hours a day. Now not 24 hours a day, 23 hours a day.

There's always one hour of rest. Just like with the futures. It'll be between the hours of 5:00 PM and 6:00 PM on weekdays. It'll close on Friday at five. It will open back up on Sunday at six. And then every other day after that, it'll do the same thing closed at five, open up at six closes at five, open up at 6 23 hours a day, five days a week.