Which SPY options strategy to 3x return in a month

Discussion in 'Options' started by keroppi, Nov 6, 2019.

  1. keroppi


    I want to find an options play that has the potential to 3x my capital in a month.

    Say for example I believe SPY will close down 10 points in one month's time (to 297 points at 7 December) which option should I buy or sell to achieve this. I am not discussing why I believe this to happen to not, I am just looking at which option is best for maximising profit for this particular play.

    I looked at various puts for different expiries in November and December but I cannot find one that will generate 3x my capital in one month

    Do you have any suggestions?
  2. Options jump 100% quite regularly, so I'm not sure why you can't find one that would generate 3x that return if SPY does close at 297 by dec 7.
    Wheezooo likes this.
  3. keroppi


    Is there any options contract you can recommend specifically for that?

    I was playing around with the options calculator but can't find any that can generate a 3x+ return
  4. gaussian


    Come up short on rent this month?
  5. You're right, I can't find one that would give you a 3x return, but a 2x return seems possible. For example, ATM last traded at 5-ish, and would have a value of $10 if price hit 297 at expiry.
  6. wallstreetbets is to your left, plenty advice for you there.
    FSU likes this.
  7. There's always the option of betting your capital at 3:1 odds on Russian roulette. You'll get your wish if you win, and you'll never know if you lose...

    Switching from the slightly macabre to only slightly less gruesome - e.g., buying puts and fervently praying for another flash crash - SPY is not going to work for what you want. Not with such a short expiration, and not in the current market volatility.

    But since you're already out on a limb and madly plying a roaring chainsaw without a guard on it, let's just slip you into something a little less comfortable: VIX. If we throw in a little extra assumption - that this drop is going to happen very quickly, and that you have a reasonably good idea of when this is to happen, then tripling your money is not going to be much of a problem.

    If SPY - which more or less follows SPX - was to crash 10 points, this would imply that SPX, at 10x the size, would drop by 100. If this happens very quickly, then there will be much gnashing of teeth and fouling of pants... but more importantly, the rallying of the VIX (which tracks the volatility of SPX, and acts like a maddened crackweasel when startled.)

    If you believe that this is going to happen by, say, the 13 Nov expiration, you could buy the ATM call for ~$1.50 and sit back, secure in your knowledge of coming events. As soon as VIX shoots up to around 18.75, you'll get triple your starting tendies!

    ...fortune. I meant "fortune", of course. How silly of me.

    (Good luck with your, um, business plan. Just remember: down, not across.)
    fishON!, Axon, keroppi and 1 other person like this.
  8. keroppi


    Which specific option are you referring to? What expiry date?

    Anything else close to 3x+ return
  9. gaussian


    I'm actually concerned for this guy now. The US national suicide prevention hotline is 1-800-273-TALK (8255).

    This will end badly for you. Don't be an idiot. I would suggest people stop trying to help this guy find ways to make 3x in a month. This type of talking is desperation and not a search for an interesting trade. OP will be better off not finding a trade. Don't help him.
    Wheezooo, vegamedic and nooby_mcnoob like this.
  10. keroppi


    Appreciate the concern. I'm not putting everything I have on this trade. Just looking for ideas
    #10     Nov 7, 2019