The risk management plan in the Papakong88 0DTE strategy (Ref 1) is to spread the risk capital equally into 25HTE, 0DTE and junk options daily (Ref 2).
Junks are options which are very far OTM. The OTM is usually 4xEM or larger compared to the regular options at 3XEM or greater. Selling junks can be a strategy by itself.
For example,On 7/24/26, I sold the 27350/27250 at about 11:22 CT for 0.30. NDX was 28370 down 85. The 27350 put is 1021 points OTM. NDX closed at 28128. PS expired. ~~The annualized rate of return is 75%~~ (EDIT: see u/ThetaEdgeHQ comment below).
For next Monday (7/27), I sold a junk 25HTE 26500/26400 PS for 0.59. The 26500 put is 1600 points OTM and is 4.4XEM.
Ref:
1. [https://www.reddit.com/r/options/comments/1s5n636/i\_picked\_half\_a\_million\_pounds\_of\_pennies\_ytd/](https://www.reddit.com/r/options/comments/1s5n636/i_picked_half_a_million_pounds_of_pennies_ytd/)
2. [https://www.reddit.com/r/options/comments/1sbgx7w/managing\_risk\_in\_a\_picking\_pennies\_0dte\_strategy/](https://www.reddit.com/r/options/comments/1sbgx7w/managing_risk_in_a_picking_pennies_0dte_strategy/).