Yesterday on July 29 I bought a 1DTE Call SPXW expiry today 7/30 7430 Strike.
I bought it for $5.50. SPX was trading near 7330 when I bought it.
It was right at the end of the day and it did not go much lower.
I know that there is THETA decay on these options but was not expecting the THETA hit to be so much. In fact I was expecting to be way up.
I woke up today and SPX was up almost 50 or 60 pts or .75%. I sold it at the open
But somehow I still managed to lose money. The Call Option I bought was now worth only $3.00 despite a fantastic overnight run. The market continued to go up surprisingly. The highest price today reached around $10
I had a feeling that we would get a bounce as SPX / SPY nearly tagged its weekly expected move.
I was right with the idea - the plan worked - but I still lost money.
Can someone explain why. Which expiry date would have worked better for me?