The 0DTE strategy with zero risk? Boomer Dan’s “Levitation trades” explained

Finance-focused summary (0DTE “Levitation trades” on the S&P)

Core claim / objective

• Dan Westbrook (“Boomer Dan”) describes a 0DTE options strategy on the S&P (cash-settled index) designed to eliminate risk quickly so the position’s P&L “risk graph” (the pink zero line) is above breakeven for the rest of the day.
• The strategy aims so that once it “levitates,” it becomes “zero or minus zero” risk, assuming the trader uses cash-settled index products and manages exits appropriately.

Instruments / tickers

• Index: S&P 500 via cash-settled instruments
  • References S&P and discusses SPX-style cash-settled index mechanics.
• Options:
  • 0DTE at-the-money (ATM) credit spreads
    • Put credit spreads (bullish) and call credit spreads (bearish)
  • 0DTE debit spreads and butterflies
  • Sometimes mentions iron condors / condor variants
• Hedge alternative: MEES futures (used as a hedge substitute)
• Other vehicles mentioned (as alternatives): XSP, SPY
  • He notes he prefers SPX for structure/cash-settlement mechanics.

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Step-by-step / methodology (as described)

A) Credit spread → in-profit flip into butterfly/tent framework

1. Start (early session)

   • Enter an ATM credit spread on 0DTE S&P
     • Bullish: put credit spread
     • Bearish: call credit spread
   • Target roughly 1:1 risk/reward
     • Example: sell credit spread ~$255, risk ~ $245, targeting ~10–20% profit on the trade lifecycle.

2. Add hedge immediately (safer initiation)

   • Buy a same-expiration hedge—simplest version described:
     • Buy a 0DTE put or call on the opposite side around “$1” option value.
   • Manage the position by monitoring the pink line sag (P&L vs. time/underlying movement).

3. Wait for the initial directional move

   • After about ~20 minutes, if the credit spread is in profit, proceed.

4. Flip maneuver

   • Convert the profitable credit spread into a debit spread / butterfly by buying the opposite-side legs, creating a floating butterfly (his “tent” concept).

5. “Levitation” condition

   • The structure is arranged so the worst case sits above the zero line (locked profit).
   • The trader can optionally stack more butterflies to raise guaranteed profits further.

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B) “Stacking” into a wall/tent of multiple butterflies

• If the market keeps moving in the preferred direction:
  • Add additional butterflies (or condor-like structures) at nearby strikes.
  • The intent is that each new butterfly increases total guaranteed bottom-line profit.
• He indicates he generally continues adding until end of day (or until it no longer makes sense).

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C) Wing management / optional “rip off” outer wings

• If outer wings become very cheap due to price movement:
  • Place orders to buy back (“rip off”) the wings at tiny prices
  • Example concept mentioned: around ~5 cents
• Goal: reduce remaining extrinsic value while keeping the position risk-controlled.

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Key numbers and examples explicitly mentioned

(These are examples from a Thinkorswim walkthrough; they are not presented as guaranteed outcomes.)

Example 1: Demonstration “naked call” flip (illustrative only)

• He starts with: buy 0DTE ATM call
• Claims the call shows $1,570 risk initially (he notes he would not actually trade this naked setup).
• After ~15–20 minutes:
  • If in profit, perform a flip by selling the other side to lock in via a debit spread structure.

Claimed outcomes after levitation

• Guaranteed profit ~ $640 even if it “crashes all the way to zero”
• Potential upside ~ $1,140 depending on where it finishes

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Example 2: Typical “real” start (credit spread + hedge → floating butterfly)

• Initial put credit spread (bullish):

  • Strike width: about 5 points
  • Credit: around $255 (target ≥ $250, with some “fudging” possible)
  • Worst-case loss: ~$245
  • Risk/reward: about 1:1

• After ~20 minutes:

  • “Complete the other side” to form a butterfly.
  • Claims guaranteed profit ~ $125 even if price goes all the way to zero or up to the moon.
  • Upside mentioned for landing near the tent tip/slopes:
    • ~$590–$600 potential

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Hedged initiation risk figures

• Hedge concept: buying the hedge option around “$1.”
• Example risk descriptions include:
  • ~$10 loss at some point if price moves against
  • If it ends at the “wrong extreme”: ~$345 loss
  • He states he would not allow it to ride that far (he’d exit earlier).

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“Cry uncle” / exit thresholds

• He selects a loss limit commonly:
  • $50 to $100 loss range on a one-contract basis
• If the position “sags” without reaching profit/levitation:
  • He closes and resets.

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Recommendations / cautions (explicit)

• Use must be cash-settled indexes (e.g., S&P / SPX-style cash-settled products)
  • Warns against underlyings that could lead to assignment if not managed (avoid instruments where you could be put to stock at end of day).
• Not set-and-forget
  • Until truly floating/locked, the strategy requires active intraday discretion.
• Primary failure mode
  • If price meanders inside the tent, the pink line sags gradually toward worse outcomes—so monitor and exit at predetermined points.
• When big profit spikes occur
  • Don’t “let it sit” expecting more; capture profits when the structure performs well.

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Risk management framing (risk profile scale)

• After levitation is established, he rates the risk as:
  • “zero or minus zero” on a cash-settled index.
• At initiation with hedge:
  • He characterizes it as about risk level 1–2 (based on a referenced 1–10 scale in the interview).

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Disclosures

• The transcript does not include a formal “not financial advice” disclaimer, but it is an interview/personal trading account emphasizing discretion and risk graphs.

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Presenters / sources

• Dan Westbrook (“Boomer Dan”) — options trader; creator of the “levitation trades” framework; mentions a free ebook and website boomerDan.com.
• John — interviewer (name not provided in subtitles).