Monday Zero-DTE Analysis: Lower Profit Targets Outperform in Volatile Markets
Update: 2025-12-01
Description
Hosts Liz and Jenny analyzed Kai's two-week zero-DTE study revealing that mechanical 25% profit targets worked perfectly (100% success) while 50% targets significantly underperformed due to one extreme directional session. The analysis covered the chaotic period including the day markets swung from +125 to -125, with the segment noting that despite the violence, SPX still spent 30-45% of those sessions inside iron condor strikes, providing "enough time for active profit taking before breach." The key insight was that in volatile environments, lower profit targets prove superior - the 25% target group achieved 89% win rate versus 80% for 50% targets, with dramatically lower max loss percentages (11% vs 20%). The VIX-1D chart revealed it exceeded regular VIX only once during the period (first occurrence since October 21st), potentially marking the volatility peak. The study emphasized that call-side testing dominated (68% call-side vs 32% put-side outside strikes) consistent with strong market rally, though hosts cautioned this represents only 2-3 weeks of data requiring continued monitoring as market conditions evolve.
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