🚨I’ll be live at 10:30 a.m. ET with Nate🚨
It’s Market Outlook day with myself in the lead, so we’ll take a look at the bull and bear cases, how the best part of a presidential market cycle is almost here and more [tap to join us for Opening Playbook]!
There’s a concept I always stress when I’m walking through my 0DTE options strategies — and honestly, it’s the whole reason I can sleep well at night despite trading short-dated contracts.
It’s the buffer.
When I sell options, I’m not selling them in-the-money (ITM). I’m positioning them out-of-the-money (OTM), which means I don’t need a perfect directional move to win. The market can go higher, stay flat or even move against me — and I can still walk away with a full winner.
Why the Buffer Works
My primary 2PM Income trade is a credit spread, but this works for other strategies as well. First, I assess the market setup and choose the appropriate side. Then I select an OTM option to sell, and buy another option farther away to define my maximum risk. Finally, I confirm that the distance between the current price and my short strike provides enough breathing room for the trade.
For example, a bull put credit spread combines a sold put with a lower-strike put bought for protection. Because the premium received from the sold put is greater than the cost of the protective put, the position begins with a net credit. The goal is for the market to remain above the short put strike through expiration.
From there, the market can finish higher, stay flat or even move lower. As long as it does not close below my short strike at expiration, the spread can earn its maximum profit. The market may even dip below that level intraday, but the spread’s expiration value is determined by where the market finishes.
Recently, I sold the 29,010 put strike while the market was trading significantly higher. The breakeven level sat near the day’s lows, creating a meaningful buffer. Although the market moved lower during the session, it did not finish below that level, so the trade still worked.
That’s not luck. That’s structure.
Defined Risk, Daily Discipline
If the setup calls for a bearish position, I can use a bear call credit spread instead. The structure is flipped: I sell an OTM call and buy a higher-strike call for protection. The market can finish lower, remain flat or rise modestly as long as it stays below the short call strike through expiration.
No strategy wins every time, and the buffer does not eliminate risk. Fast moves, changing volatility and late-session reversals can still challenge a position. That’s why I define the risk before entering, size the trade appropriately and monitor the setup rather than assuming yesterday’s conditions still apply.
I evaluate and share these setups daily because strike selection should respond to the current market. That consistent process helps me adapt while keeping the core framework intact: Sell OTM premium, cap the downside and leave room to be wrong.
You don’t need perfect timing. You need a disciplined structure that gives the trade room to work — without exposing your account to unlimited risk.
Graham Lindman
Graham Lindman Trading
Follow along and join the conversation for real-time analysis, trade ideas, market insights and more!
- Telegram:https://t.me/+abM5RWRJKrpkNWI5
- YouTube:https://www.youtube.com/@NewMoneyCrew
Important Note: No one from the ProsperityPub team or Graham Lindman Trading will ever contact you directly on Telegram.
*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.Â
P.S. Have You Heard About the Midterm Miracle?
It’s a pattern where stocks surge after the midterms, regardless of who wins… eight out of every 10 times.
Join the gang at 10 a.m. on Wednesday and you’ll find out how to take advantage of this pattern!
