Welcome to Defined Edge. If you're new here: this is a newsletter about trading options with a defined maximum loss, built for the wave of new retail traders who've discovered 0DTE options over the past two years. No hype, no hot takes, no "guaranteed" anything — just the mechanics, explained plainly.

Same-day-expiration options — contracts that expire the day you trade them — now make up more than 45% of all SPX options volume. Two years ago that number was a fraction of that. Over 8 million new options-approved brokerage accounts have opened since 2024, and a huge share of that volume is people buying same-day contracts hoping for a fast payout.

It's easy to see why. 0DTE options are cheap, they move fast, and a small directional bet can turn into a big win in a matter of hours. That's also exactly why they're dangerous.

Somewhere between 80% and 90% of retail options traders lose money over time. Not "some trades go wrong" — the majority of people doing this consistently lose. And it's not because they're unlucky or undisciplined. It's because of how most of them are trading.

The typical retail 0DTE trade looks like this: buy a call or a put, betting the stock moves a certain direction by end of day. If you're right, you can make a lot, fast. If you're wrong — and directional bets are wrong more often than most people expect — you lose the entire premium. There's no partial credit. It's binary.

Data on this specific pattern backs it up: traders who buy directional options outright win only about 35-40% of the time. That's the trade almost everyone starts with, and it's stacked against you by design.

Traders who sell defined-risk spreads instead of buying naked options win 55-65% of the time. Same underlying stock, same expiration, completely different odds — because the trade is structured differently.

A defined-risk spread means you know your maximum loss before you place the trade, and it's capped no matter what happens. The simplest version: instead of buying a call outright, you sell a credit spread — you collect a premium upfront, and your maximum loss is the width of the spread minus what you collected. You're not betting on a big move in your favor; you're betting the stock doesn't move sharply against you, which is a much easier bet to win.

This isn't a secret or a "hack." It's the actual mechanical reason professional options sellers have better long-run odds than retail directional buyers. The market rewards patience and defined risk over hope and unlimited downside.

(Updates each real send with a current market observation.)

If you want to actually build and visualize these trades before you place them, TradingView is what most serious options traders use for charting and strategy visualization — new signups get a $15 credit toward their first plan.

Defined Edge is educational content, not financial advice. Options trading involves real risk, including the potential loss of your entire investment. Nothing here is a recommendation to buy or sell any specific security.