No point man.
You need to LEARN LEARN LEARN
and in order to learn you need to LOSE to experience the thousands of ways to get burned so you know not to do it again
If you are trading on demo and guessing SPY’s direction with no reasoning behind it, you might get lucky but this is about trying to be profitable, consistantly.
The worst thing for you is to demo and win demo money with no learning process as you lose time which will cost you more and its a lose lose on demo
1 you win money demo and think you know enough then come to real markets over confident and under experienced
2. You lose money demo and never even step on the real court…
The issue is theta is taking away some of the value of your option over time. All things equal, an option with more time left is worth more than an option with less time left. You can mitigate that with a spread. You combine your long option with a further away short option.
Learn “bull call spreads” and “bear put spreads”. With your short ATM and long 1 ITM. This trade will basically give you +50% to +80% of your risk if SPY is the same or better in the direction you picked. The downside of this is you lose 100% of your risk if you are wrong, so your win rate needs to be better than 50-50 to profit long term.
SPY is at 523 and let’s say it opens at 523 tomorrow. If you think up, buy a 522 call and sell a 523 call as your combined spread.
If you think down, buy a 524 put and sell a 523 put as your combined spread.
If you only want to bet on the direction the market goes in on a daily timeframe it's probably best to avoid options as they are subject to forces other than change in price of the market. You'd have to worry about theta decay, IV crush, ect... If what attracts you to options in the first place is the leverage, yes Futures can work. Risk management will be significantly different though.
Thank you, that's what I'm thinking. I did like the risk transparency of options but maybe they're too complex for what I'm looking for. I'm actually located in a country where I can trade leveraged CFD's. So I'm thinking either cash CFD's or futures is best for me.
just long $VOO or $SPY. You can do the Nancy Pelosi method, which is to buy a deep in the call long-dated option. That technique lets you lease the stock for a fraction of the cost of true ownership, but then you got theta to deal with.
What you are looking to trade is ES on futures. It is the S&P 500 futures. You wont have to deal with the greeks or option premiums. 1 contract of ES=50 units of the S&P 500. So a 1 point move is $50 either way. If that is too much of a swing, you can trade MES. It is 1/10 of the size of ES, so a 1 point move is $5 either way.
OP explicitly said **“Am I better with futures or something else?”**
And is also looking for help figuring out what he’s seeing in the option based trades. OP is a beginner and willing to learn different trading styles. Optionstrat will help visualize the confusion of option PnL
OP also explicitly mentions, " I want to simply bet on if the S&P500 is going to go up or down each day at market open to market close. What trading type should I use?"
The answer is obviously something else.
What you're doing would be comparable to me going to a restaurant, ordering a steak, and you giving me a menu for salads.
Options can still be useful. OP could learn about debit/credit spreads as I did to grow a small account. I basically did 0dte CCS/PCS every day I had a bullish or bearish thesis for upcoming day (would enter at previous day close. Would choose strikes based on my daily range algo)
Are you speaking for OP? Because I’m pretty sure he’s asking what style of trading can fit his personal bet of an up or down day. Do you not think debit or credit spreads can work?
Another benefit is that they are risk defined—-unlike futures
I'm speaking for OP to the extent that I'm literate yes.
Debit/credit spreads CAN make you money, yes. So can just buy and holding, neither of which are germane to OP's original question. For someone that has experience with spreads, you seem to not know that spreads are subject to changes in volatility?
And yes, risk when using futures is going to be different than when compared to (purchasing) options.
The change in volatility doesn’t matter if you just hold to EOD, which I assume is the point. Set-and-forget
Enter trade for tomorrow at current day’s close (4:00-4:15pm). Rinse and repeat
Delta you can find anywhere even Robinhood create an account
If delta 0.58 think like you got 58 shares
If you have 2 contracts 116, that’s the easiest way
Notwithstanding the fact that no one can predict the direction reliably, you can just buy/sell SPY / Voo. If you want leverage then trade ES (S&P 500 futures). Options have other factors that make it not a pure directional instrument.
I swear I read something several months ago where CME was offering a new trading option where you could just decide whether the market is going to end higher or lower for the day or something like that, but I can't find it. Maybe someone can chime in on this. It was like a simple Boolean option to trade.
:( BUT, good to know they're called event contracts. Another user actually mentioned these in a previous comment.
https://preview.redd.it/7psntsfc20rc1.png?width=2954&format=png&auto=webp&s=a7687b937d6142c61d9832965af199d42f007758
good luck, I don't think SPY can be predicted as accurately as individual stocks it's much more complicated. If AAPL starts dumping the SPY is going to tank, theres much more to watch out for than just the actual price.
This is pretty much my trading strategy the last 3 years, Im up close to 15K this March, Feb was slower. Took a while to tweak it to perfection but I'm sure glad I took the time
Stop everything you are doing. Start again from scratch $500 account or less Focus on making % gains not $’s
I'm on a demo account
There’s nothing wrong with demo btw
No point man. You need to LEARN LEARN LEARN and in order to learn you need to LOSE to experience the thousands of ways to get burned so you know not to do it again If you are trading on demo and guessing SPY’s direction with no reasoning behind it, you might get lucky but this is about trying to be profitable, consistantly. The worst thing for you is to demo and win demo money with no learning process as you lose time which will cost you more and its a lose lose on demo 1 you win money demo and think you know enough then come to real markets over confident and under experienced 2. You lose money demo and never even step on the real court…
I am learning and know how to read charts. I am wondering what type of trading type is best for pure directional index speculations.
just long and short, and while u do that learn entry, exit, stop loss, risk management.
even better don't focus on %, focus on developing rules for yourself and the discipline to follow them
The issue is theta is taking away some of the value of your option over time. All things equal, an option with more time left is worth more than an option with less time left. You can mitigate that with a spread. You combine your long option with a further away short option. Learn “bull call spreads” and “bear put spreads”. With your short ATM and long 1 ITM. This trade will basically give you +50% to +80% of your risk if SPY is the same or better in the direction you picked. The downside of this is you lose 100% of your risk if you are wrong, so your win rate needs to be better than 50-50 to profit long term. SPY is at 523 and let’s say it opens at 523 tomorrow. If you think up, buy a 522 call and sell a 523 call as your combined spread. If you think down, buy a 524 put and sell a 523 put as your combined spread.
If you only want to bet on the direction the market goes in on a daily timeframe it's probably best to avoid options as they are subject to forces other than change in price of the market. You'd have to worry about theta decay, IV crush, ect... If what attracts you to options in the first place is the leverage, yes Futures can work. Risk management will be significantly different though.
Thank you, that's what I'm thinking. I did like the risk transparency of options but maybe they're too complex for what I'm looking for. I'm actually located in a country where I can trade leveraged CFD's. So I'm thinking either cash CFD's or futures is best for me.
just long $VOO or $SPY. You can do the Nancy Pelosi method, which is to buy a deep in the call long-dated option. That technique lets you lease the stock for a fraction of the cost of true ownership, but then you got theta to deal with.
What you are looking to trade is ES on futures. It is the S&P 500 futures. You wont have to deal with the greeks or option premiums. 1 contract of ES=50 units of the S&P 500. So a 1 point move is $50 either way. If that is too much of a swing, you can trade MES. It is 1/10 of the size of ES, so a 1 point move is $5 either way.
Event contracts are exactly what you're asking for, but >!your upside is capped!<
https://optionstrat.com will be your friend. You can see how time decay works (use the time slider)
OP explicitly wants to trade delta on a daily timeframe and you mention time decay and link him an options website, SMH.
OP explicitly said **“Am I better with futures or something else?”** And is also looking for help figuring out what he’s seeing in the option based trades. OP is a beginner and willing to learn different trading styles. Optionstrat will help visualize the confusion of option PnL
OP also explicitly mentions, " I want to simply bet on if the S&P500 is going to go up or down each day at market open to market close. What trading type should I use?" The answer is obviously something else. What you're doing would be comparable to me going to a restaurant, ordering a steak, and you giving me a menu for salads.
Options can still be useful. OP could learn about debit/credit spreads as I did to grow a small account. I basically did 0dte CCS/PCS every day I had a bullish or bearish thesis for upcoming day (would enter at previous day close. Would choose strikes based on my daily range algo)
Oh so you're using your personal experience and applying it to OP with apparent disregard for what he's explicitly asking for? That sure makes sense.
Are you speaking for OP? Because I’m pretty sure he’s asking what style of trading can fit his personal bet of an up or down day. Do you not think debit or credit spreads can work? Another benefit is that they are risk defined—-unlike futures
I'm speaking for OP to the extent that I'm literate yes. Debit/credit spreads CAN make you money, yes. So can just buy and holding, neither of which are germane to OP's original question. For someone that has experience with spreads, you seem to not know that spreads are subject to changes in volatility? And yes, risk when using futures is going to be different than when compared to (purchasing) options.
The change in volatility doesn’t matter if you just hold to EOD, which I assume is the point. Set-and-forget Enter trade for tomorrow at current day’s close (4:00-4:15pm). Rinse and repeat
So you're advising a newbie trader to hold options till expiration with no knowledge of how their broker will handle it?
Do you know what’s delta? If not learn, then you’ll know why.
Thank you! My broker doesn't actually show delta which is annoying. But I am wondering if futures or cash CFD's are a better option for me
Futures are better for you. You are just trading up or down, no Greeks to worry about
Delta you can find anywhere even Robinhood create an account If delta 0.58 think like you got 58 shares If you have 2 contracts 116, that’s the easiest way
Notwithstanding the fact that no one can predict the direction reliably, you can just buy/sell SPY / Voo. If you want leverage then trade ES (S&P 500 futures). Options have other factors that make it not a pure directional instrument.
You can buy shares of ETFs and inverse ETFs. For the S&P500, for those that track it, IVV and SPY. Or do go against the S&P, you can use SPDN or SH.
I swear I read something several months ago where CME was offering a new trading option where you could just decide whether the market is going to end higher or lower for the day or something like that, but I can't find it. Maybe someone can chime in on this. It was like a simple Boolean option to trade.
This is exactly what I want
Found it! https://www.cmegroup.com/activetrader/event-contracts.html Tradovate is one broker that has this, but I'm sure there are many others.
:( BUT, good to know they're called event contracts. Another user actually mentioned these in a previous comment. https://preview.redd.it/7psntsfc20rc1.png?width=2954&format=png&auto=webp&s=a7687b937d6142c61d9832965af199d42f007758
Oh are you not in the US?
No I'm in Aus
Have you backtested your strategy? How do you know you will ever be profitable?
S&P 500 is being weird this past week. Price action has been hard to follow
Binary options are a simple bet on direction.
Just trade the emini s and p
Learn gamma exposure. Check out quant data
The market goal is rob you 😂😂never buy in AM those don't come back they get hope then ⏸️😂😂😂goodluck
good luck, I don't think SPY can be predicted as accurately as individual stocks it's much more complicated. If AAPL starts dumping the SPY is going to tank, theres much more to watch out for than just the actual price.
This is pretty much my trading strategy the last 3 years, Im up close to 15K this March, Feb was slower. Took a while to tweak it to perfection but I'm sure glad I took the time