How to trade 0DTE $SPY options

Posted on September 27, 2025

traders guide

0DTE SPY Trading Checklist / Ruleset

1. Premarket & Setup

✅ Check overnight news, economic calendar, SPY futures
✅ Identify premarket high/low
✅ Identify previous day’s VWAP
✅ Load 0DTE OI heatmap / gamma pin zones if available
✅ Set alerts at premarket high, low, and pin zones

2. Entry Rules

✅ Only trade long if SPY close > premarket high; trade short if SPY close < premarket low
✅ Trade in direction of the trend confirmed by 9/20 EMA on 1–5 min chart
✅ Enter after a clear breakout or consolidation of at least 3–5 bars
✅ Confirm volume > 50–60% of average 5-min volume
✅ Trade ATM or 1–2 strikes ITM/OTM only for quick scalps or defined-risk spreads
✅ Use limit orders whenever possible

3. Exit Rules

✅ Set a profit target (e.g., 50–70% of option premium if buying, or 50% of max credit if selling)
✅ Set a stop-loss (e.g., 0.3–0.5% SPY move against your option or defined max loss on spread)
✅ Exit all positions by 12:00 PM ET unless part of a strictly defined afternoon setup
✅ If short premium near expiry, adjust or hedge when underlying moves 1–2 points toward your short strikes

4. Timing & Session Rules

✅ Avoid trading first 5–10 min of open (high volatility, thin liquidity)
✅ Avoid trading during major economic prints unless strategy accounts for volatility spike
✅ Avoid trading last 30–60 min of session unless scalping or managing gamma

5. Position & Risk Management

✅ Max 1–2 trades per direction per day
✅ Max risk per trade ≤ 1–2% of account
✅ Daily max drawdown stop: 3–5% of account, then stop trading
✅ Adjust position size based on delta exposure and gamma risk

6. Option Structure Rules

✅ Prefer defined-risk spreads or iron flies for selling premium
✅ Limit naked short positions unless fully hedged
✅ Only trade high-liquidity strikes to reduce slippage

7. Flow / Heatmap Considerations (Advanced)

✅ Trade with heavy gamma / OI flows, avoid fighting it
✅ Identify key strikes where dealers’ hedging could pin or repel price
✅ Avoid taking direction against concentrated OI at expiry

8. Daily Review

✅ Log entry/exit time, strike, greeks, size, reason for trade
✅ Track slippage & P&L
✅ Review missed trades and mistakes weekly
✅ Adjust rules based on observed market behavior (but keep core filters consistent)

💡 Pro tip: This checklist is designed to reduce noise and emotional trades while letting you take only high-probability 0DTE setups. Even one rule ignored (like exiting before noon or trading against premarket bias) can turn a profitable day into a loss, so discipline is key.