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Studying the relation between just how volatile SPY 0-day-to-expiration options are in regards to the underlying. A 1% directional move in SPY can yield a 1600%+ in most cases if you can time it right in regards to direction + strike.

I would never actually trade or anything like that. It's just fun to scrape data. Historical option chain data isn't really publicly free/available so I wrote a scraper + analytics on top of it.



FT has written extensively about the rise of zero day options on the S&P 500 index.

Example: https://www.ft.com/content/312e9b3c-a5e0-4eff-8b9a-8637696d2...


date,start_time,end_time,underlying_start_price,underlying_end_price,instrument_start_price,instrument_end_price,instrument_price_change_percentage,instrument_type,instrument_strike_price 2023-10-09,14:52:01,18:56:19,427.14,432.79,0.09,1.92,21.5294,Call,431.00 2023-09-27,18:11:48,19:12:18,422.74,427.31,0.09,2.42,27.4706,Call,425.00 2023-10-12,16:21:35,18:11:44,437.19,431.44,0.06,1.92,33.9091,Put,433.00 2023-10-06,14:09:50,18:48:25,420.93,431.04,0.06,4.12,73.8182,Call,427.00

I don't think HackerNews supports enough Markdown to show tables but... tell me what you think about that.


Any conclusions?


I could be wrong because of the obvious downside of "if you get it wrong it'll expire 100% worthless by end of day" but if you can use "technical analysis" to know when to enter a long/short position, I'd say don't use margin (short) and don't buy the underlying (long), instead buy a slightly out of the money (this is where predicting which direction the market will go and for how much/how long gets... impossible) call or put depending on direction can yield a better return.

Obviously it's all gambling but I see why so many people are attracted (addicted?) to it (Robinhood traders)

If you lose 100% of a $100 out-of-the-money bet 7 times but then hit an 800% ROI... you break even, right?




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