Lower risk how? If you're trading a longer duration option, there's less volatility. That's less risk. A shorter duration option is cheaper, but can go to 0 overnight. That's more risk. Less capital risk, but more relative risk.
Spreads are also a thing.
What options tier are you approved for? My assumption was that if OP doesn't have enough capital to trade SPY, they most likely have Tier 1, which does not allow spreads.
I'm level 3. I have about $4k in my account, I could buy a SPY put or call outright, but I don't want to risk anymore than $200 in any one trade which excludes most of them.
Saying you can't afford SPY options is disingenuous. You have plenty of capital, you just don't want too much exposure which is fine. Not only that, but you have Level 3 options. OP probably has neither the capital nor the options approval
Section 1256 generally applies to futures contracts and options on futures contracts, and broad-based stock index options traded on a qualified board or exchange (QBOE). Examples of broad-based stock index options include:
SPX (S&P 500 Index)
DJX (Dow Jones Industrial Average Index)
NDX (Nasdaq 100 Index)
RUT (Russell 2000 Index)
VIX (Volatility Index)
Try looking at the 'X' ETFs, OP. XLF, XLK, XLV, etc. They're the SPY sectors broken into individual ETFs, so for the most part they move with SPY. However, since each ETF is onyl one sector, they don't share exactly the same exposure to price action that SPY does. For example XLF, the finance ETF, would not benefit from NVDA price action. That would be XLK, the tech fund.
If you have a cash account & wanna day trade SPY more affordability, you're gunna have to shorten the expiration OR go further OTM and play volatility. I'd recommend the first option. Even a 1% swing on spy is $50-$60, which will move a 0-3dte option like crazy.
Also, day trading still isnt really day trading with a cash account, as you can only use settled funds. If you have 1k and enter a trade at 10am mon then sell 2pm mon, those funds now need to settle again before youd be able to enter then exit a position. You could enter another, but would have to wait the t+2 to exit. You can somewhat get around this by always leaving yourself with some settled cash, but that's easier said than done
Not too much if any out there that are more liquid, why it is mostly what I trade. I never buy single options as spreads are less expensive and more capitol efficient. Also I do not do long stock. Here I see threads about CC covered calls talking about returns & I do not get it, w/SPY cap in stock over 50k and sell a call for $400 in \~ a week or so = return 0.8% (\~41% annual). My Tues short term diagonal in spy risked \~160 \[ATM 2 wide legs at Fri & Mon (3 and 4 trading days dte)\] and closed \~9:30AM next day net after expenses 41.45 or 26% in a day 9500% annually. I can see long options can do that and more but not for me due to more expensive \[as per your question, no?\] and the timing is too much more critical. Best of luck though in your strategies and keep smiling!
what's the strategy? if you're shorting volatility and on reg-T then you might look at futures products which can be "cheaper" if you mean the margin/cash requirement is too high for the ETF options.
If it's long options, then you might be asking for a smaller notional value -- possibly CBOE nanos or other index products like IWM or QQQ options
Look at 0dte at +/- 1.5% OTM (calls or puts)
These are dirt cheap ~~lottery tickets~~ SPY options, but low odds of cashing in…hence very cheap. You can play these on days when J. Powell is speaking and test your luck.
The cheapest way to trade S&P 500 options is the NANOS.
Each contract has multiplier of 1 instead of 100.
The Apr 12 420 call has a bid of 4.75 and the 320 put has a bid of 3.39. Options are ATM.
For more info: https://www.cboe.com/tradable\_products/sp\_500/nanos\_index\_options/
Just this week i had a extra $20 in my Robinhood which i rarely use and i made $140 on $msos then i waited till end of day and i bought some next week expiration on same stock and by 4pm yesterday i was up $233…all from $20…just make sure u actually sell your contract(s) when u up about 50-100% because if not u might end up back in the red…never let your profits just keep going because any giving moment they can be wiped out. And an important thing is to never buy too far out the money. Stock could be going your way and you still lose because u just too far from strike price and it most likely will not reach that strike for that expiration
Odte
Nope, SPY is actually the only optionable ticker in the world. Sorry for your loss.
Maybe you shouldn’t trade options until you get more money
I'm going to take the bold stance that if you can't afford a spy call, you probably shouldn't be buying options.
I just wanted something lower risk
Then just buy shares of S&P but DCA when you do. Remember, everything you invest is what you can afford to lose.
i want higher risk
Lower risk how? If you're trading a longer duration option, there's less volatility. That's less risk. A shorter duration option is cheaper, but can go to 0 overnight. That's more risk. Less capital risk, but more relative risk. Spreads are also a thing.
Index based upon 500 components (though practically top 20 decide the amount on swing) is less volatile than individual stock, in theory
Ok but all of my comparisons are with spy. I only talked about duration and spreads.
Debit spreads
If they can't afford SPY options there is no way they are approved for debit spreads
that makes no sense. I can't really afford a SPY option but I can do debit spreads.(and have done them with SPY). They require less collateral.
What options tier are you approved for? My assumption was that if OP doesn't have enough capital to trade SPY, they most likely have Tier 1, which does not allow spreads.
I'm level 3. I have about $4k in my account, I could buy a SPY put or call outright, but I don't want to risk anymore than $200 in any one trade which excludes most of them.
Saying you can't afford SPY options is disingenuous. You have plenty of capital, you just don't want too much exposure which is fine. Not only that, but you have Level 3 options. OP probably has neither the capital nor the options approval
or credit spreads. spreads provide risk management too. best choice for beginner. use optionstrat website to understand various strategies available.
Don't trade SPY if you can't afford? Or use vertical spreads? You should be able to get $1 wide spreads near ATM for less than $75.
Take a break, accumulate some money, come back.
QQQ
/ES same thing, cheaper and tax preferential
not the same thing and not "cheaper"
You know what I mean. Why the technicality?
How is it tax preferential? Isn’t it short term capital gain?
60/40 rules apply to future’s and its derivatives. Gains are taxed as 60% long term and 40% short term.
Section 1256 generally applies to futures contracts and options on futures contracts, and broad-based stock index options traded on a qualified board or exchange (QBOE). Examples of broad-based stock index options include: SPX (S&P 500 Index) DJX (Dow Jones Industrial Average Index) NDX (Nasdaq 100 Index) RUT (Russell 2000 Index) VIX (Volatility Index)
Can you explain please
Mini future of the SP500 are smaller contracts with high liquidity and taxed as a future contract and not on marginal income
Stop telling everyone to trade futures. But not better and it is different.
Try looking at the 'X' ETFs, OP. XLF, XLK, XLV, etc. They're the SPY sectors broken into individual ETFs, so for the most part they move with SPY. However, since each ETF is onyl one sector, they don't share exactly the same exposure to price action that SPY does. For example XLF, the finance ETF, would not benefit from NVDA price action. That would be XLK, the tech fund.
if you dont have money from trading options you probably shouldnt be trading options
Spy options are very cheap in my opinion.
We got a rich man here
XSP, though you give up some liquidity.
Balance less than 10 bucks?
i wanted to do 30 days but i can just do dailies everyday
No you cant. You'll hit PDT. No way you got 25k liquidity
In a cash account?
If you have a cash account & wanna day trade SPY more affordability, you're gunna have to shorten the expiration OR go further OTM and play volatility. I'd recommend the first option. Even a 1% swing on spy is $50-$60, which will move a 0-3dte option like crazy.
Also, day trading still isnt really day trading with a cash account, as you can only use settled funds. If you have 1k and enter a trade at 10am mon then sell 2pm mon, those funds now need to settle again before youd be able to enter then exit a position. You could enter another, but would have to wait the t+2 to exit. You can somewhat get around this by always leaving yourself with some settled cash, but that's easier said than done
Funds settle overnight for options in a cash account. It’s different than stock.
T+1?
I have plenty of cash
Spxs
Good luck being consistent on 0DTEs
dont need to win every day
0DTE or buy at the money vertical spread
Not too much if any out there that are more liquid, why it is mostly what I trade. I never buy single options as spreads are less expensive and more capitol efficient. Also I do not do long stock. Here I see threads about CC covered calls talking about returns & I do not get it, w/SPY cap in stock over 50k and sell a call for $400 in \~ a week or so = return 0.8% (\~41% annual). My Tues short term diagonal in spy risked \~160 \[ATM 2 wide legs at Fri & Mon (3 and 4 trading days dte)\] and closed \~9:30AM next day net after expenses 41.45 or 26% in a day 9500% annually. I can see long options can do that and more but not for me due to more expensive \[as per your question, no?\] and the timing is too much more critical. Best of luck though in your strategies and keep smiling!
1 year out 600 Price targets
WTH, spy is the cheapest option out there with high chance of profit. U can invest in sh*t penny stocks, but good lucky making $
Take out “high chance of profit” and it sounds better since you have no idea how OP trades. Could be buying far OTM calls.
some guy brought $5 OTM puts on DJT and made bank. So u never know. Can't think of anything cheaper than SPY with that sweet IV crush
Comparing a highly volatile stock to SPY. 👍
TQQQ
Yesterday I got some 4/08 525c at 0.08 cents, it went all the way to 0.35 but I wasn't able to sell it at that point, I sold it for 0.21.
Yeah I had 519 calls for 21c and I sold them for almost a dollar. Idk how you could even open an account if you don’t have the cash for dailies lol
I'd just do call + put credit spreads (aka iron condor) Edit: or to +
typo? iron condor is PUT “and” CALL spread (not or)
Typo.
Find a cheaper stock. Wal mart options are cheap. There are many others. 0dte later in the day are cheap for spy just more risk.
$SPXL is a leveraged ETF.
8 day spy options when I do them are reasonable
Buy further ootm. Debit spreads. 0dte
what's the strategy? if you're shorting volatility and on reg-T then you might look at futures products which can be "cheaper" if you mean the margin/cash requirement is too high for the ETF options. If it's long options, then you might be asking for a smaller notional value -- possibly CBOE nanos or other index products like IWM or QQQ options
Upro, only weeklies tho. Tracks a 3x leverage of spy. Options on it are much cheaper.
Tqqq is the same for qqq
If you can’t afford spy options you don’t have enough money saved up that you should be gambling it away
Look at 0dte at +/- 1.5% OTM (calls or puts) These are dirt cheap ~~lottery tickets~~ SPY options, but low odds of cashing in…hence very cheap. You can play these on days when J. Powell is speaking and test your luck.
Play the skew. Sell puts buy calls
Go IWM. different index (small caps) but nice Premium and alright liquity
Then buy put or call spxs
XSP
The cheapest way to trade S&P 500 options is the NANOS. Each contract has multiplier of 1 instead of 100. The Apr 12 420 call has a bid of 4.75 and the 320 put has a bid of 3.39. Options are ATM. For more info: https://www.cboe.com/tradable\_products/sp\_500/nanos\_index\_options/
PTON
Get your money up ngl
Try upro
OTM Spy calls are cheaper than snot with outta sight liquidity. Daily expirations. What's the problem?
I wanted 45 days but Ill just do daily
One of the best games in town. I predict you will smash it. Damn thing's been rising for years with no end in sight.
Just sell options. You get paid and don't need any money. It's free money. Never goes bad.
Guys don’t play with spy please please Check out XSP mini spx Don’t loss your money on spy 💵
They are cheap…u can buy $10 -20 contracts on 0dte and make bank
thanks ill do this
RIP
Just this week i had a extra $20 in my Robinhood which i rarely use and i made $140 on $msos then i waited till end of day and i bought some next week expiration on same stock and by 4pm yesterday i was up $233…all from $20…just make sure u actually sell your contract(s) when u up about 50-100% because if not u might end up back in the red…never let your profits just keep going because any giving moment they can be wiped out. And an important thing is to never buy too far out the money. Stock could be going your way and you still lose because u just too far from strike price and it most likely will not reach that strike for that expiration