#DayTrading $SPY calls and puts, a simple trading strategy

Update 6/14/21

Last Thursday and Friday the SPY options also racked up 100% gains each day but I didn’t get around to posting it neither here nor on Twitter.

Oh, well…

But today one must pay attention.

The SPY ATM 423 call, expiring today, on a bottom-pick entry (see the chart below) turned from falling down to flying up faster than anyone trading that piddly AMC can say “to the moon.”

It closed the day trade up 378%. That’s on each $1,000 traded a $3,780 profit!

The chart below is set up to display the dollar/percentage gain per each $1,000 position (scalable, of course) in the white flag on the right axis.

(Click on the chart for a larger view)

Update 6/8/21

Sort of a “double whammy” day today.

First the ITM 424 PUT, expiring tomorrow, then an attempt at a scalp with the ATM 423 CALL that turned out a lot better than a scalp (aw, shucks):

Then:

Both charts in the tweets above are set up to display the dollar/percentage gain per each $1,000 position (scalable, of course) in the white flag on the right axis.

Update 6/6/21

SPY opened Friday, 6/4, at 420.75 on a gap up and never looked back.

As a result the ITM 420 Call was never in danger of being stopped for a loss and finished the day trade up 84%.

The chart below is set up to display the dollar/percentage gain per each $1,000 position (scalable, of course) in the white flag on the right axis.

(Click on the chart for a larger view)

Update-6/3/21

Today’s in-the-money SPY 217 Call, expiring Friday, was a bottom pick that did not get stopped out for a loss (often happens on bottom picks) ripped up off the low to a 117% peak before grinding down, down, down (see the chart below) to a final gain of 57% for the day trade.

Kinda disappointing.

The chart below is set up to display the dollar/percentage gain per each $1,000 position (scalable, of course) in the white flag on the right axis.

(Click on the chart for a larger view)

Update — 6/1/21

On the day after a holiday and first day of a new month one would think that would be bullish and so it was — for about a minute.

After the overnight gap up, the SPY plopped right off the open giving a put by signal that seesaw all day (see the chart below) peaking up 270% before edging off to close the day trade up 213%.

(Click on the chart for a larger view)

Update — 5/24/21

It was a “gap and go” day for the SPY.

The ETF gaped up the open based on the overnight futures and did not look back for most of the day before a slide into the close.

As a result the in-the-money SPY 416 Call rose as high as 120% before slipping down on the final slide to a 65% gain to end the day trade.

The chart below is set up to display the dollar/percentage gain per each $1,000 position (scalable, of course) in the white flag on the right axis.

(Click on the chart for a larger view)

Update — 5/21/21

After a gap up Friday, SPY reversed at the end of the first half hour of trading right off its high for the day with several intraday divergences to trigger a buy in the at-the-money 217 Put at 68 cents.

From then on SPY and the put see-sawed with fairly wide swings (see the chart below) before finishing weak to match the weakness off the gap at the start of the day. Weakness begun ending in weakness at the end is a fairly frequent price behavior just as strength early often ends in strength late.

The SPY 217 Put closed the day trade with a gain of 180%.

That is $1,1820 for each $1,000 committed to the trade (see the white flag on the chart below) with a 10% stop-loss that was never hit.

(Click on the chart for a larger view)

Update — 5/20/21

Today’s 212 Call, Friday’s expiration, peaked 30 minute before the close at up 140%, and closed the day trade up 77.5%.

I mention that peak because in the last half hour of the regular session there was obviously plenty of time to call it a day at more than 100%. Especially with the long swings in both directions throughout the day (see the chart below). It was a Dramamine day.

The chart below is set up to display the dollar/percentage gain per each $1,000 position (scalable, of course) in the white flag on the right axis.

(Click on the chart for a larger view)

Update — 5/18/21

Today’s in-the-money 217 PUT, Weds expiration, closed the day trade in a choppy market session up 82%.

The chart below is set up to display the dollar/percentage gain per each $1,000 position (scalable, of course) in the white flag on the right axis.

(Click on the chart for a larger view)

Update — 5/14/21

Today’s in-the-money 412 CALL close the day trade up 91%. It had peaked during the day up 130%.

It was one of the best trade patterns (see chart below) — triggering right after the open with 10% stop-loss risk that was not stopped during the day.

The chart below is set up to display the dollar/percentage gain per each $1,000 position (scalable, of course) in the white flag on the right axis.

(Click on the chart for a larger view)

Tweet on the positions:

Update — 5/12/21, end of the day.

Today’s at-the-money 411 PUT closed the day trade up 235% (despite being stopped for 10% losses twice).

The chart below is set up to display the dollar and percentage gain per each $1,000 position (scalable, of course) in the white flag on the right axis.

(Click on the chart for a larger view)

Tweet on the position:

Update — 5/10/21 end of the day.

Today’s 423 PUT has an overall 450% gain with a 490% run into the close, after two breakeven stops and two 10% stop losses.

Note to reiterate: that is a $4,500 for each $1000 traded in the strike.

Update — 5/5/21 end of the day.

Truly a razzle dazzle Martini day in the SPY options.

First a 120% gain stirred in today’s 218 Put.

Then a 137% gain shaken in the 216 Call.

Stirred again to finish off the day trades with a 180% gain in the 218 Put.

This chart is set to display return per $1K in play in the white flag and closed trades in the green flag line on the right axis (the #1Kdaytrade on Twitter), which also makes for easy percentage calculations.

The Tweets’ time stamps:

Updated — 4/29/21 intraday.

Today’s SPY 421 Put, expiring tomorrow, up 154%.

Updated — 4/21/21 at the close.

Today SPY 411 ITM Call up 250%.

Updated — 4/21/21 intraday.

Today’s SPY 411 Call up 100%.

https://twitter.com/TheGodOfTrading/status/1384878278213656582

Plenty of games to be played during the day — like one-third off up 50plus percent, another third up 100 percent, and letting the last third run until the close of the day trade.

This chart is set to display return per $1K in play in the white flag or horizontal line on the right axis (the #1Kdaytrade on Twitter), which also makes for easy percentage calculations.

THE TRADING STRATEGY

There are so many options strategies in the stock market the head spins — a straddle, a strangle, a naked and/or a covered put and/or call, a calendar, a condor, an iron condor, an iron butterfly (isn’t that a rock band?) and any combination of any of these for hedging purposes, for capital appreciation or preservation, for gambling. Mind boggling.

But buying options…

Buying options, just plain buying a call or a put, everyone will say is a “fool’s game.”

Regardless of whether a trader buys calls or puts on index ETFs like SPY or QQQ or IWM, or buys options on stocks, there are only three things that can happen — the option goes the trader’s way (good), or the option goes against the trader (bad), the option goes sideways with price decay over time (also bad).

Two out of the three possibilities for the option buyer are losers. What fool would want to play that game?

But is it really a fool’s game, like everyone in options trading says?

For day traders it doesn’t have to be.

Let’s take SPY options as the prime example — very liquid across multiple strikes, tight spreads, hardly any time decay on a trade for only a day, a stop-loss is close by and immediate, and the profits, if there is a trend for the day, can be substantial, even rather astounding.

Also great for day-trade scalping with the weekly calls and puts on various liquid stocks. Must be stressed the key to trading the weekly stock option is liquidity in order to avoid spreads too wide to turn around a profit during a single day.

One last note: again, the key, as always, is persistence, discipline, experience, and an entry signal the trader is comfortable taking.

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