Uncomfortable truth: a lot of 0DTE traders are earning between a third and a quarter of what their backtests promised. So are we. And I'd rather say that out loud than pretend otherwise. Two things happened. The market matured. 0DTE volume has grown ~20–25% a year. More participants, less easy premium. Blind selling used to capture 7–10%. Now it's closer to 4–5%. That's not a bug — that's what a maturing market looks like. The backtests were flattering. Tick-level data and minute-to-second fills are now available. Capping stop losses on a backtest overstates results — by up to ~40%. If your stop is $6 and the spread jumps to $8 in the next second, you eat slippage from $8, not $6. That gap is enormous when your edge is 10–15 cents. So the honest expectation now: ~4–5% expected value, roughly 10 bps a day selling ~2% of the account — barring odd execution. Anyone still quoting you a 40% CAGR off a clean backtest either hasn't updated their tools or is selling you something. #quantfinance #optionstrading #investing

Took a classic 60/40, split the bonds in half. Half Gold and Half Bonds. Here are the results:

In 2022 the S&P fell 18%. A mutual fund holding nothing but stocks finished the year up 19%. No crystal ball. No market timing. Long the stocks they liked, short the ones they didn't. That's the whole trick: long/short lets a stock picker use both of their opinions instead of one. But before you pay hedge fund fees for one, here's the question almost nobody asks. "Did it beat the market?" is the wrong question. The right question: did it beat the cheap version of itself? Most "hedge fund" returns are just market exposure plus factor tilts you can buy in ETFs for a quarter of a percent. Run a simple regression of the fund against those cheap ingredients and look at what's left over, the return the cheap stuff can't explain (the residual). That leftover is the only thing worth a fee. Some funds have real leftover, year after year. Others are repackaged index funds charging hedge fund prices.

Check out my most recent appearance on @tastyliveshow . Talking 0 DTE and my journey on becoming a full time trader

"0-DTE is going 5 days a week. I'm gonna sell my house and quit my job." From Uber driver to fund manager — Mark Anderson @multistratmark returns to the show with @JermalChandler @TraderMikeyB for an update on how reps + cheaper AI let him progress fast👇

Watch the full convo here: piped.video/8EySXh1fyjQ

Your P&L tells you what happened. It can't tell you why. Nine years and roughly 55,000 0DTE trades taught me that when a strategy bleeds, "premium selling stopped working" is almost never the real answer. This year proves it. The premium is fine. Statistically a normal year, actually leaning rich. Sellers are still getting paid to take the risk. What changed is the path. The market lurches, clips your stop, then comes back before the close. The move stops you out, then apologizes. Same paycheck. Different route. Completely different problem. If you can't name the line item that's bleeding, you don't have a trading problem. You have an accounting problem. Every cent has an address. Go find it.

The most popular "3-fund portfolio" on YouTube isn't diversified. Large-cap growth + large-cap value + the S&P 500. Blend three tickers and you've just rebuilt the S&P 500 with extra fees. You did more work to own what you already owned. And it's all one bet: US large-cap stocks. Even the respectable version — 60% US / 20% international / 20% bonds has a weak third leg. Bonds hedge exactly one world: deflation. When inflation hits, stocks and bonds fall together. That was 2022 your safe leg sank right alongside your risky one. Real diversification is three legs that each win in a different regime: → Momentum — offense when the market's trending. → International small-cap value — the counter-punch when the US trend reverses. → Managed futures instead of bonds — the diversifier that actually diversifies. It goes long or short across stocks, bonds, commodities, and currencies. It doesn't need deflation to work. The catch: managed futures will bore you for years in a calm bull market. You don't hold it for the quiet years — you hold it for the ones that blow up everything else. Same three-fund simplicity. Built to survive more than one world.

@multistratmark talks through gamma for SPX 0DTE at a high level-- full discussion here: piped.video/live/tjbpyCqcyFc…

There are only two ways to beat the market. Most investors use one without realizing it and ignore the other completely. Lever 1: Add leverage. Borrow, buy the index, hold on. This beats the market on absolute return. It works great on a spreadsheet. In real life, a 3x index ETF can draw down ~80% — and almost nobody holds through that. Leverage doesn't fail because the math is wrong. It fails because you fold at the bottom. Lever 2: Kill the market risk. Swap the part of your portfolio that moves with stocks for something that doesn't — a ballast on the other end of the seesaw. Bonds, gold, market-neutral. None of them beat the market. They're not supposed to. Their job is to stop the whole thing from tipping over when stocks sell off. That's how you win on risk-adjusted return. That's the whole menu. Add risk. Subtract market risk. Or do both — on purpose. The catch isn't a formula. It's sitting in a disciplined, boring book while someone online flexes a concentrated bet. Most people can't. That's the real edge — and the real reason people pay someone to hold the line.

@NavTrading1 and Troy dig into why picking the best minute in a backtest isn't a best practice.

Everyone in this space has spent the last year asking whether the 0DTE edge has been arbitraged away. I put it to @multistratmark directly, and his answer was the most rigorous I have heard. He does not like the word "edge". He calls it risk premium, and his point is that it ebbs and flows enormously rather than existing or not existing. Selling every entry through the day swings between roughly 3/4 standard deviations of profitability, up and down, over time. The last 9 months have been the worst stretch in his dataset going back to 2018. That sounds terminal until you look at how he tested it. He took the results in 4-day chunks, reshuffled them a thousand times to build something like 200 years of synthetic history, and asked where the recent run sits. 11th percentile. Bad, in other words, but nowhere near broken. He checked the crowding story too. Volume growth in SPX options has been running roughly in line with the growth of the index itself, so on that measure the space is not filling up faster than the market is growing. Conclusion: the risk premium overshot and will come back.

Momentum is real. Chasing it is how you hand the premium back. Just look how momentum crashed in 2009. Top 10 holdings are half of SPMO. It rebalances twice a year. Its own signal discards the freshest month. The question was never whether to own it. It's what you hold next to it so you can survive.

Sharpe ratio is edge X the square root of event. So the more you can diversify across more occurrences the higher the Sharpe goes. The frequency of events if often what gets overlooked the most and almost entirely where our performance comes from in 0 DTE. A sheer mountain of uncorrelated occurrences over short periods of time.

The smartest people on earth are all crowded into the same tiny pools of alpha — 0DTE, niche markets, betting lines. Shark-filled, chummy water. Everyone bleeding each other for scraps. Meanwhile there's a massive blue ocean sitting right there: reasonable return expectations, real risk management, multiple uncorrelated risk premia combined, wrapped in something fee-efficient, tax-efficient, and durable across every environment. That's the multi-strategy approach. And it's frankly where the majority of my own money sits. It's not glamorous. Holding ~50% equity by design, when the S&P is up 25% you'll trail. In 2022, when everything else broke, you'd have beaten the market by a wide margin. Judge it across cycles, not quarters. It's the most-studied approach in finance for a reason. The biggest, most durable pools of capital in the world run some version of it. Dalio built an empire on "8 to 12 uncorrelated bets." I love 0DTE. I still run it. But if you're asking where I want my capital to actually live for the next decade — it's here. Chasing the richest alpha is the most lucrative game right up until it isn't. The blue ocean is boring. Boring compounds. #multistrategy #alternativeinvestments #investing

With leverage back in the headlines this week, @multistratmark breaks down what he actually risks per trade managing real money.

The 60/40 portfolio is often viewed as the gold standard of balance in investing, but let's examine what it truly represents. The expected return on the bond side, after taxes, is approximately 25 basis points a year. This indicates that the majority of total returns in a 60/40 portfolio actually come from the 60% allocated to stocks. Therefore, this strategy may not provide genuine diversification; rather, it resembles an equity portfolio with a drag from bonds, which are labeled as the balanced component. It's important to clarify that bonds are not without value, nor should everyone rush into alternative investments. The choice depends on individual net worth, timelines, and objectives. However, if the purpose of the "40" is to offer true diversification—a secondary engine that performs differently when stocks decline—bonds have not consistently fulfilled this role. The events of 2022 highlighted this issue when both stocks and bonds experienced declines simultaneously. Multi-strategy approaches can provide that second engine effectively, incorporating managed futures, macro strategies, carry trades, and uncorrelated premia that do not all move in tandem with equities. While these options may be more volatile than bonds, they are better suited to fulfill the role that the "40" was intended to serve. Balanced investing should truly mean balanced. It's essential to scrutinize what lies beneath the surface of investment labels.