Volatility Cuts Both Ways: A Painful Lesson, a Massive Win, and New Strategy Trials
This week was emotionally and financially intense — a rollercoaster of losses and redemption. With only three trades placed, we saw one of our worst drawdowns to date, followed immediately by one of our biggest single-trade wins ever. The importance of position sizing, discipline, and diversification became clearer than ever.
📊 Weekly P&L Summary
| Trade | Strategy | Lot Size | P/L | Return | Notes |
|---|---|---|---|---|---|
| 1 | 2/7 Double Calendar | 8 | –$4,144 | –18.7% | Delta stop hit on Day 53 |
| 2 | 0DTE Call Vertical | 3 | –$2,294 | –87.2% | Underlying moved down sharply |
| 3 | 0DTE Put Vertical | 3 | +$8,263 | +319.1% | Manual exit on big gain |
✅ Net Weekly Profit: +$1,825
📈 Net Weekly Return (on $50K base): +3.6%
📌 Trade Breakdown
🟥 Trade 1 – 2/7 Double Calendar
- Opened: Tue, Sep 2 @ 36.85 debit
- Closed: Thu, Sep 4 @ 30.00 credit
- Strikes: 6330p / 6450c
- Expiration: Shorts Sep 4, Longs Sep 9
- Exit Reason: Short leg delta breached 0.70 → auto close
- Lot Size: 8
- P/L: –$4,144 (–18.7%)
📉 Biggest loss to date. Market moved outside tent and triggered automatic exit rule. Still, the system worked as designed — damage was contained per defined risk.
🟥 Trade 2 – 0DTE Call Vertical
- Opened: Fri, Sep 5 @ 8.77 debit
- Closed: ~30 minutes later @ 1.15 credit
- Strikes: 6535/6575 call spread
- Lot Size: 3
- P/L: –$2,294 (–87.2%)
- Exit Reason: Underlying dropped right after entry.
⚠️ High-risk directional bet went against us quickly. Strict position sizing (10% allocation) saved the day.
✅ Trade 3 – 0DTE Put Vertical
- Opened: Fri, Sep 5 @ 8.63 debit
- Closed: ~35 minutes later @ 36.20 credit
- Strikes: 6525/6445 put spread
- Lot Size: 3
- P/L: +$8,263 (+319.1%)
- Exit Reason: Manual profit capture after rapid directional move.
🚀 Explosive gain. The underlying fell sharply and the spread ballooned in value. Same capital exposure as the earlier call vertical — vastly different outcome.
🔍 Lessons & Observations
- ✅ The system works. Even after the biggest drawdown, the next valid trade recovered all losses and added profit.
- 🎯 Small sizing saved me. 0DTE strategy was tested with just 10% allocation, reducing psychological and portfolio damage.
- 🧠 The key is consistency and resilience. You have to survive the big red days to be around for the green ones.
- 📅 2/7 DTE strategy still valid—just hit a bad spot. But with data backing September performance, I’m staying the course.
📘 Looking Ahead to Week 9
- I’ll continue trading only on Mon & Tue with 2/7 DTE calendars.
- Friday trades will use 10% allocation to explore directional verticals based on Option Omega backtests.
- The goal: build asymmetric reward profiles with defined risk and clear exits.
⚠️ Disclaimer
The information presented in this blog post is for educational and informational purposes only and is not intended as financial or investment advice. I am not a licensed financial advisor. All trading strategies discussed reflect my personal experience and are not recommendations to buy or sell any security or derivative.
Trading financial instruments such as options, futures, or stocks involves significant risk and may not be suitable for all investors. You should conduct your own research, consider your financial situation, and consult with a licensed financial advisor before making any investment decisions.
Past performance is not indicative of future results. Use of this information is at your own risk.